Implementing Project Portfolio Management: From Organization Structure to Recognized Revenue · Module 11 · Burdening and Cross-Charge
Lab: three burden treatments and a cross-charge
Lesson 120 of 198 · 2 min
An hour. Finance applies a fringe rate to labour, and an overhead rate to total direct cost AFTER fringe. That is compounding, and the arithmetic is checked by hand. Rates differ between the Consulting and Engineering organizations. Internal projects do not burden. And the capital programme burdens at overhead only, without fringe. Consulting and Engineering are separate business units within ONE legal entity. About one engagement a month uses staff from both. Finance wants the receiving business unit to carry the cost at the providing unit's fully burdened cost, with no margin. Three burden treatments — full, none, and overhead-only — which is three schedules and three project type assignments. "Overhead on total direct cost AFTER fringe" is the compounding decision from Lesson 2, stated explicitly so you cannot default it. And "separate business units within one legal entity" decides the cross-charge model. The criterion asks you to justify it…
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In this module: Module 11 · Burdening and Cross-Charge
- 1Why burdening exists
- 2Burden structures and cost codes
- 3Burden schedules and rates
- 4Burden in the accounting
- 5Cross-charge: the two models
- 6Configuring borrowed and lent
- 7Transfer price rules and schedules
- 8What breaks
- 9Lab: three burden treatments and a cross-charge