The Golden State: Where & How to Live, Secure, Visit, Enjoy and Thrive in California

Plumbing Heating And Piping

For estimating purposes it is appropriate that overhead expense be divided into two separate classifications:

1. General overhead expense is that expense which is required for the operation of the general office and establishment. This expense, generally, will show on the books of the company even if no contract or construction work is actually performed. It is granted that the amounts of some of these items will be influenced to an extent by the yearly volume of work performed. However, regardless of volume, they should be considered.
2. Job overhead expense is that portion of the overhead expense which is more directly applicable to the job itself.

These items of overhead expense, both general and job, are listed and discussed in the following articles.

2.2. Shop Expense

Shop expense is that expense connected with the operation of the shop which is usually a part of the home office establishment. This account will be in most cases a catchall for items of expense for which there is no account. Examples of these items are janitor service for the office, lost time which cannot be charged to the customer, and equipment repair and maintenance.

2.3. Truck and Automobile Expense

Truck and automobile expense will include the cost of gasoline, oil, repairs, and maintenance of all moving equipment not actually placed on a project or job and charged out to that job. This includes the cost of operation of automobiles used by the officers of the company and the engineering or estimating personnel.

2.4. Advertising


Advertising should include the cost of all methods and forms of advertising used to secure additional business or contracts.

2.5. Insurance

Insurance will include the premiums on all insurance policies carried by the company other than those premiums directly applicable to a specific job or project.

2.6. Utilities

Utilities will include gas, water, electricity, etc., for heating, lighting, and other service requirements for the office and shop establishment.