SPREAD ALLOCATION ENTERED PERCENTAGE VALUE WEIGHTING
Use spread allocation entered percentage weighting to distribute overheads or indirect costs
Allocations are one of a number of options you have for spreading overhead or indirect costs across a project budget. When allocating an overhead item to multiple direct cost items, ‘Weighting’ determines HOW the overhead will be spread.
It’s a good idea to understand the two different Spread Allocation Weighting methods, so that you can choose the best option depending on what you’re doing. The default setting for Weighting is ‘Item Value’.
Let’s go over the second method, Entered Percentage Weighting.
The Entered Percentage method of Weighting, allows you to specify what percentage of the overhead item will be spread across each direct cost item. Let’s look at an example here.
The information at the top lets you know which overhead line number you are working on and how many items it is being allocated to. You can simply enter in the percentages here in the Percentage Allocated column.
The amount allocated will appear in the Indicative Allocated Value column. The allocated value is indicative because it hasn’t taken into consideration the rounding that occurs during the final spread calculation.
The total of the percentages entered will be updated and displayed in the ‘Total Percentage Allocated’ column here.
This method allows you to allocate an overhead item to a set of direct cost items where some of the direct cost items have an estimated total value and some do not.
Total Percentage Allocated shows you the sum of all the allocated percentage in the direct spread allocation window. Total Allocated Value is the value represented by the total percentage allocated.
If you would prefer the overhead item to spread proportionally across multiple direct cost items, then using the Item Value weighting method will be more efficient.
And that’s an introduction to working with Spread Allocations Entered Percentage Weighting in Expert Estimation.
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