What type of costs does Home Office Overhead encompass?

Home Office Overhead refers to costs that are necessary to support the overall operations of a business but are not directly tied to any specific project or job site. Salaries and employee benefits fall under this category as they represent the compensation of personnel involved in general management, administrative tasks, and other overhead functions. These costs are essential for maintaining the organization’s functionality and infrastructure, which ultimately supports project execution but is not billable to individual projects.

On the other hand, direct costs of materials, job site labor costs, and miscellaneous site expenses are all costs that can be directly attributed to specific projects or job sites. These costs vary per project and are incurred based on direct operational activities rather than the broader management and administrative support needed to keep a company running. Thus, while important to project execution, they do not fall under Home Office Overhead.