Cost Allocation

The Cost Item Record - Allocation tab lets you to spread costs from a single Cost Item Record to one or more other cost items in the Cost Breakdown Structure (CBS) Register.

Allocation Item - The cost item to be allocated, where you define the quantities, resource employments and the logic that determines how to allocate the item throughout the bid.

Allocation Target - A cost item to be the recipient of allocated cost, as defined within the Allocation Item. There may be one or many Allocation Targets for one Allocation Item.

Distribution - A read-only cost item in the CBS representing an Allocation Target's proportional share of the Allocation Item.

You can choose from several methods to determine specifically where and how much cost to spread:

Quantity - Specify the amount of the Allocation Item to be spread to each Allocation Target.

Proportionately based on another field - Allocate proportionately by one of many available cost item values, usually based on time or cost.

Percentage - Specify the percentage of the Allocation Item to spread to each Allocation Target.

Unit Cost - Use the unit cost from the Allocation Item and the quantity of each Allocation Target to drive the Forecast (T/O) Quantity of the Allocation Item.

Cost Item Allocation is a good means of spreading costs throughout a bid for the purpose of determining appropriate bid prices.

Only Level 1 cost items can be allocated, including Add-On and Escalation dependent cost items. A subordinate cost item cannot be allocated, and a cost item that is assigned to a pay item cannot be allocated.

Cost Allocation

With Cost Item Allocation, you can track the cost of one broad cost item by distributing the cost of that item to other cost items, so that the cost can be tracked on a more detailed level. This gives better visibility into the cost that makes up an item. For example, you can spread ST&S from one cost item to multiple cost items that will use ST&S.

Imagine that a large portion of your scope of work for the job you are bidding has concrete. You face the options of batching your own raw materials or purchasing the materials from a supplier. You can use cost allocation to create the cost of a batch plant and allocate it to different items, and then compare this unit cost to the unit cost of purchasing the materials from a supplier.

The Allocation tab allows you to spread costs from an Allocation Item to one or more Allocation Target(s).

In the Allocation Target list, the [Unit of Measure] Quantity column caption displays the Unit of Measure of the Allocation Item. For instance, if the Allocation Item's Unit of Measure is Cubic Yards (CY), then the caption displayed for this column is CY Quantity.

A Distribution cost item is created as a read-only subordinate cost item under each Allocation Target. It is copied proportionally with the quantity/cost defined to each different item in CBS.

View Filter Excludes Cost Item Allocation Details

A View Filter option is added to show only the level 1 cost item distribution in the allocation destinations to provide you with a clear and comprehensive view of the CBS register, especially when there are many allocations. When you are allocating cost items, the allocations are created in the destination cost item by creating a copy of the entire allocated cost items structure. This filter allows you to simplify the view by displaying only the parent level allocation cost item.