Rachel,
The accepted method to "causally" assign and trace indirect and shared expenses to products, services, channels, and customers / members is to use activity-based costing (ABC) principles. When the ABC calculation is traced at periodic intervals (e.g., quarterly) "programs" that are changing with time can be costed. Here is a link to the IMA's Statement on Management Accounting (SMA) that I authored titled "Implementing ABC." It is an excerpt from my book, "Activity-Based Cost Management - An Executive Guide."
http://www.garycokins.com/images/pdfs/Cokins%20IMA%20SMA%20Implementing%20ABC.pdf
I welcome further questions. (I have a part time role as the IMA Executive in Residence.)
Gary
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Gary Cokins
Director/Manager
Cary NC
United States
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Original Message:
Sent: 07-14-2014 10:18 AM
From: Rachel Freund
Subject: Nonprofit overhead allocation
I am looking for tools and/or best practices for overhead allocation to programming for a non-profit whose programming is not a standard product, i.e., the resources required to produce the programming change from one year to the next. Does anyone have any resources to share on the best approach to assigning overhead to this type of programming?
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Rachel Freund CPA
Director/Manager
Chicago IL
United States
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