Which of the following items is/are needed to compute General and Administrative (G&A) Overhead?

• A. All of the above
• B. Estimated G&A Expenses
• C. Estimated G&A Carryover from Prior Year
• D. Estimated Total Direct Labor

Answer: (A)

To compute G&A Overhead you need three pieces: the amount of G&A to recover, any carryover from the prior year, and the base you’ll apply the overhead to. The estimated G&A expenses tell you how much overhead should be recovered in the period. The carryover from the prior year accounts for any overhead that wasn’t fully absorbed last year, ensuring continuity and accuracy in the current budgeting. The estimated total direct labor provides the allocation base used to apply that overhead to products or activities, linking the overhead to the workload you’re budgeting for. Without any one of these elements, you’d either be missing the total overhead to recover, lacking a prior-year adjustment, or lacking a sensible way to allocate the overhead. All of these pieces are needed, so the best approach is to include every item.