Q.  I’m confused about whether I am supposed to add an overhead amount to the IR&D labor costs I include in my G&A pool.  Could you help?

A.  It depends on whether the IR&D labor is included in your overhead base.  If a cost is included in your overhead base, then you are saying all costs included in the base should have a prorata share of overhead costs applied to it.  If IR&D labor is included in the overhead base, then an overhead amount should follow the IR&D labor, whether it is a direct research project, an indirect IR&D project or simply transferred to the G&A pool.  If IR&D costs are not included in the overhead base, then those costs do not get a prorata share of overhead costs assigned to it and hence the IR&D costs allocated to the G&A pool should not include an overhead apportionment.    

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