Percentage of Cost Overhead Method

You can set up a "Percentage of cost" overhead method to calculate overhead based on a percentage of the following types of costs:

• Costs incurred by the joint venture.

  This enables you to use joint venture cost transactions whose distributions haven't been invoiced as the basis for the calculation. In the overhead method, you can specify a segment and segment value to limit the transactions included in the calculation to a particular type of cost, such as material costs or maintenance costs.

• Costs incurred from general operating expenses, such as utilities, rent, maintenance, and so forth.

  This enables you to use costs recorded in subledger accounting or the general ledger that aren’t directly related to a joint venture as the basis for the calculation. You can calculate overhead based on transactions for a particular period, from the beginning of a fiscal year or calendar year to a period, or from the inception date of a joint venture to a period.

  You can also use a sliding scale for this type of overhead calculation. A sliding scale enables you to apply different percentages to different portions of the costs for the overhead calculation.