Example of Defining Burden Structures

The following scenario illustrates the relationship between expenditure types and burden cost codes in a burden structure. This relationship determines what burden costs Oracle Fusion Project Costing applies to specific raw costs.

Note: Before you can define burden structures, you must define expenditure types, burden cost bases, and burden cost codes. Use the Define Burdening task list to manage burden cost bases, burden cost codes, and burden structures.

Burden Structure

The following graphic shows an example of the expenditure types and burden cost codes that are assigned to the Labor, Material, and Expense burden cost bases.

The following table is an alternative to the graphic to explain expenditure types and burden cost codes that are assigned to the Labor, Material, and Expense burden cost bases.

Cost Base	Expenditure Type	Burden Cost Codes
Labor	Professional, Clerical, Sales	Administrative, Fringe, Overhead
Material	Supplies, Construction Material	Administrative, Material Handling
Expense	Travel, Meals	Administrative

The following table shows an example of the multipliers that are used to calculate burden costs for raw costs in the Labor, Material, and Expense cost bases. This is an additive burden structure that applies each burden cost code to the raw costs in the appropriate cost base. Multipliers are defined on the burden schedule.

Burden Cost Base	Raw Cost Amount (USD)	Administrative Cost Code Multiplier	Labor Fringe Benefit Cost Code Multiplier	Labor Overhead Cost Code Multiplier	Material Handling Cost Code Multiplier
labor	1,000	0.20	0.20	0.40	0
material	500	0.20	0	0	0.25
expense	400	0.20	0	0	0

The following graphic shows an example of the resulting burdened costs for labor, material, and expenses.

• The following example shows the resulting burdened costs for labor.

  The following example shows the resulting burdened costs for labor.

  labor burdened cost = labor overhead cost + labor fringe benefit cost + administrative cost + labor raw cost

  labor overhead cost = $1000 * 0.40 = $400

  labor fringe benefit cost = $1000 * 0.20 = $200

  administrative cost = $1000 * 0.20 = $200

  labor raw cost = $1000

  labor burdened cost = $400 + $200 + $200 + $1000 = $1800

• The following example shows the resulting burdened costs for materials.

  materials burdened cost = material handling fee + administrative cost + material raw cost

  material handling fee = $500 * 0.25 = $125

  administrative cost = $500 * 0.20 = $100

  material raw cost = $500

  materials burdened cost = $125 + $100 + $500

• The following example shows the resulting burdened costs for expense.

  expense burden cost = administrative cost + expense raw cost

  administrative cost = $400 * 0.20 = $80

  expense raw cost = $400

  expense burden cost = $400 + $80