Transcript UMORS - Vander Kooi and Associates, Inc.

UMORS
Ultimate Multiple Overhead Recovery System
Vander Kooi and Associates, Inc
March 2005
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Introduction
UMORS is a computerized process based on the Multiple
Overhead Recovery method developed by Charles Vander
Kooi. The method outlines the manner in which overhead
expenses incurred in the conduct of a service business are
recovered through mark-ups of Materials, Equipment,
Subcontractors and Labor.
UMORS is NOT an estimating program but a program that
determines mark-up rates you need in developing estimates
and charges for the work your company provides.
The successful UMORS software is highly recommended for
small to large businesses
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Starting UMORS
User’s
Serial
Number
Date of
Release
Version
Number
Licensed User
of this Program
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Work in Progress
A quick review of the Gross Sales for the base year and projections for the new year.
Sales for
the Whole
Company
Sales for
Each
Department
in the
Company
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The Vander Kooi ABC Method
The ABC method is an easy and fair way to distribute overhead between
departments.
A = The percentage of a Departments gross sales to the Company’s total sales.
B = The percentage of Overhead Employees allocated to a Department.
C = The percentage of Field Employees allocated to a Department.
These percentages are key to properly allocating budgeted expenses to
departments in order to calculate the Labor Mark-up percentage.
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The Main UMORS Menu
This Menu will allow a user to quickly access any function of UMORS.
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General Information on
the Company Departments
Pertinent information for each department are presented to
indicate employee distribution and sales base and
projections.
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Field Employees Work Schedule
Normal work schedules and paid off-days are determined for each
department. These are used to determine department overtime and
benefits.
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Crew Type and Crew Position Definition
Define each type of crew and the crew positions associated with the work the
crew all perform. This essentially models the ideal work force structure for the
departments in the company. There is no limit to the number of crew types or
crew positions within a crew type. Each individual worker can later be assigned
to a crew and position.
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Labor Cost
Labor Cost are entered in two categories:
Overhead Employees: Company officers, office staff or an employee that is
not directly chargeable to field work projects.
Field Employees: Employees that actually perform the field work of your
company.
Short Method allows you to
input gross payroll total for a
quick calculation.
Entering each individuals
wages is the desired process.
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Overhead Employees
Simply enter the employees name and the salary or hourly rate.
Assign the employee to a department and click the ‘Calculate’ button.
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Allocating Overhead Employees Time
An overhead employees’ time can be allocated in any percentage to a company
department. That department will be responsible for generating that portion of the
employees’ pay through the overhead calculation.
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Budget Overhead Calculation
Every time you exit from the Overhead Employees screen, UMORS will prompt
you to automatically calculate and and enter data into the Budget Overhead
Category for Office and Officers Salaries. Normally, you will select ‘YES’ to the
question below. This will let you know that any changes made to the Overhead
Employees have been taken into account.
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Field Employees
Enter the names and wages for each employee that will perform the work of the
company. You can assign each employee to a department, a crew, and a position
on that crew. Optionally, you can specify whether or not the employee will be paid
overtime and what company benefits they will receive.
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Field Employees Time Allocation
Each Employees time can be allocated in any percentage to each department.
Initially the employees time is allocated 100% to the department that was assigned in
the Field Employees screen. This assumes that the employees hourly wage is
constant for all allocations. If for some reason an employee will receive a higher or
lower rate for some work, that that employee should be entered as a separate person
with a new wage rate. That persons work schedule should then be as a ‘Part Time’
basis.
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QUICK LOCATOR
There is a ‘Quick Locator’ button on a number of function screens. This will save
you time finding the record of interest quickly. Simply click on the item in the list
and then click the ‘Locate (item)’ button. You can also list the items in a number of
ways.
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Labor Burden
The Labor Burden Rates are generated for the Field Workers and the Office (or
Overhead) staffs separately. There are 9 categories that make up the Labor
Burden Rate.
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Equipment Cost Worksheet
Enter each item of equipment and vehicles that the company department owns in
order to do work. UMORS needs the following information about each item :
• Purchase price
• Amount financed
• Interest rate
• Finance period
• Years of service expected
• Hrs/day being used
• Days/week used
• Weeks/yr used
• Maintenance Cost/yr.
• (Fuel and oil)/hr
• Annual insurance
• Property tax
• License and tags
• Salvage Value
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Equipment Cost Worksheet (cont)
After you have entered the necessary data, CLICK the ‘Calculate’ button. The
TOTAL COST/HR. that should be charged for the item is calculated. The TOTAL
YEARLY COST that will result from the hourly charge is also determined.
General
Information
Area
Calculation Area
Actions Area
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Equipment Allocation and Assignment
Equipment, like employees, can be allocated to different departments. This
form will allow you to allocate each item to departments depending on the
percentage of utilization. When a department is selected, the equipment, %
used and the crew assignment will display in the top left of the form. The top
right of the form will display the departments, % use, and $/Hr. charge.
Allocation
Information
Allocation
Selections
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Rented Equipment
If you rent equipment to perform work, enter the item, rental period, rental charge
and then click the ‘Calculate’ button. There is no limit to the number of items you
can enter for each department.
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Overhead Vehicles
Overhead vehicles are vehicles that are used in support of company business
not directly billable to work projects. These could be the company officers
vehicles or allowance paid to employees that use their vehicle for work related
purposes. The data entered is basically the same as for regular equipment.
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Overhead Vehicles (continued)
Once all the overhead vehicles have been entered, and calculated, you can
assign the vehicles to employees.
Click the ‘Assign
Overhead
Vehicles’ button.
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Assign Overhead Vehicles
The overhead vehicles and the employees will display in lists. To assign a
vehicle, click on a vehicle and then on the employee. Then, click on the ‘Assign’
button. The vehicle name will disappear from the left list. The assignment will
appear in the list on the right. After you assign all the vehicles, click the ‘Next’
button.
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Overhead Vehicle Expense
On this form, you see how the vehicle cost will be allocated to the departments.
The allocation is determined by the employees’ work allocation. The additional
expense will be determined if you give the employee an Operating Allowance or
Mileage Reimbursement. This is also allocated to the departments based on the
employees work allocation.
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Materials
The Materials cost that each department requires is entered as a gross number for
each department. This is normally determined by the cost from the previous year
and then estimate whether you will use more or less. The Projected Materials cost
will be used to determine future calculations.
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Subcontractors
The Subcontractors cost is also determined from your previous year experience
and the estimating whether you will use more or less in the next year.
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Budget Overhead
The Budget Overhead data is where you will enter all the incidental expenses
incurred in doing business. This data can be entered in two ways: Corporate
Level and Department Level.
Corporate Level:
Department Level:
Expenses that
benefit all
departments or
cannot be attributed
to a department will
be entered at this
level. UMORS will
automatically
allocate the cost to
departments based
on the ABC
method.
Expenses that are
unique to to a
department are
entered at the
Department level.
There may also be
a Corporate level
allocation for the
same expense.
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Corporate Level Budget Overhead
UMORS provides 28 categories of expenses with a total of over 115 Activities in
the categories. These are provided as ticklers to stimulate your thinking and data
collection. Once again, these expenses are ones that benefit all departments and
a portion will affect that departments overhead expenses Based on the appropriate
ABC value.
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Department Level Budget Overhead
The Department Level overhead is similar to the Corporate Level with additional
information. The allocation for the category and activity from the Corporate Level
is displayed. If there is an amount that is unique for this department, then enter
the amount. The total amount will be the Activity Amount plus the Corporate
Allocation.
Corporate Allocation Amount
Total of Corporate and
Department amounts.
Department Amount
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Department Solution
The purpose of UMORS is to determine the mark-up amount for Labor charges in
order to recover the departments overhead. Part of the overhead is recovered
from marking up Materials, Equipment and Subcontractors. The residual amount
must be recovered from Labor. The Vander Kooi Method does this in a balanced
manner.
Mark-up percentage for Labor for
this department. This value
would be used in your estimating
and work charges.
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Company Solution
UMORS also calculates the Mark-up percentage for Labor for the company as a
whole. If you haven’t departmentalized your company then this is the value you will
use. For a company with several departments, this is a good reference to compare
the department recovered mark-ups.
Labor Mark-up for the
Company as a whole.
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Crew Unit Man-hour Rate Calculator
The Crew Calculator is a quick way to assemble a crew with employees and
equipment. The crews can be saved for future reference. It is also very easy to
substitute employees and/or equipment to see if it impacts the final burdened
charge. An employee or equipment can be assigned to more than one crew
making them job specific. Depending on the risk level, the percentages for
overtime, fudge factor, and profit can be adjusted on an ad hoc basis.
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UMORS Reports
UMORS provides a number of reports that provide essential reference.
Employees Reports:
Equipment Reports:
• Salaries
• All Equipment Details
• Employee Allocations
• All Equipment Summary
• Department Allocation
• Labor Burden Rates
• Equipment by Department
• Corporate Allocation
• Overhead Equipment Details
• List of Categories and
Activities
• Overhead Equipment Assignments
Solutions Reports:
Budget Overhead
Reports:
• Equipment Worksheets
• Department P/L
Crew Unit Calculator Report:
Print Screens:
• Company P/L
• Crew Unit Man-hour Rates
• All Screen Images can be
• Department Solution
printed.
• Company Solution
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UMORS Purchase
UMORS Software: $650.00
US
Included in the purchase price of the UMORS program, you are entitled to have
a brief review of your first database by a senior associate for Vander Kooi and
Associates, Inc.
If you have any questions about UMORS or wish to purchase the
program, contact Vander Kooi & Associates, Inc.
Phone/fax: 843-886-3363
E-Mail: [email protected]
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