Dive summary:
- Among the many ways to allocate overhead expenses for construction projects and arguments in favor of each, consultant Ron Roberts urges trade contractors to spread them over the actual man-hours spent working in the field in order to get the best handle on costs.
- One strong argument he makes is that if overhead is based on budgeted time and crews cannot finish in those hours, contractors effectively lose the overhead costs of those extra hours.
- By allocating to actual man-hours worked, contractors will recoup overhead regardless of where workers are, even if they finish ahead of schedule and are on to the next project.
From the article:
My mantra to my clients is "We're selling man-hours. How many man-hours are we going to sell this year?" ...
