Burdening means?

To discuss Oracle Projects & Property Manager setup and costing related matters.
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akumar.oracle
Posts: 195
Joined: Sat May 31, 2008 1:29 pm
Location: India

Burdening means?

Post by akumar.oracle »

Hi,

Can anyone explain me in simple words what does the term "Burdening" means in regards to oracle projects costing?

cheers,
Arvin
KIMKhan
Posts: 15
Joined: Tue Feb 03, 2009 3:27 pm
Location: India

Post by KIMKhan »

Hi,

Raw Cost is the Direct Cost, and Burden Cost is the cost that supports raw cost and cannot be directly attributed to the work performed. (Is the indirect cost) Ex: General & Administrative costs.

Burdening is the method of calculating burden costs by applying one or more burden components to the raw costs by applying one or more burden cost components to the raw cost amount of each individual transaction.

Quantity X Cost Rate = Raw Cost

Raw Cost X Multiplier (Burden) = Burden Cost

Raw Cost + Burden Cost = Total Burdened Cost

Burdening provides a buildup of raw cost and burden costs so that you can accurately represent the total cost of doing business.

Example:

Direct Labor cost = 1000
Indirect Labor cost = 50% of direct labor cost = 500

Total Labor cost = 1500.

Burdening is also called as Cost plus processing.

Hope this answers your question.
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