Example of Defining Labor Costing Rules

This example illustrates setting up labor costing rules to calculate overtime labor costs.

Scenario

You're asked to set up labor costing rules to calculate overtime labor costs for nonexempt and hourly employees for the InFusion Corporation.

Overtime Costs

All overtime premium costs for nonexempt employees are charged to an indirect project. Hourly employees are required to enter overtime hours manually. All labor costs, including overtime premiums, are charged to the project and task indicated on the time card.

For nonexempt employees, the expenditure types for overtime transactions are derived from the overtime labor cost multipliers that are assigned to the labor costing rule. For hourly employees, when time is charged to an overtime expenditure type, the application applies the costing multiplier assigned to the labor costing rule when labor costs are calculated.

Labor Costing Rule Details

The following table shows the labor costing rules for InFusion Corporation:

Labor Costing Rule	Costing Method	Project	Task
Nonexempt	Rates	Overtime	Time and a Half
Hourly	Rates

The following table shows the overtime labor cost multipliers that are associated with the labor costing rules:

Labor Costing Rule	Expenditure Type	Labor Cost Multiplier
Nonexempt	Overtime	Time and a Half
Hourly	Overtime	Time and a Half
Hourly	Premium Overtime	Double Time