An accounting professional requires at least two skill sets.The first is to be technically competent. Knowing how to capture, manage, and report information is a necessary skill.Second, the ability to assess manager and employee actions and biases for accounting analysis is an another skill.For instance, knowing how a person is compensated helps anticipate information biases.Draw on these skills and prepare a memo to the financial officer on the following practice of allocating overhead.

Background:Assume that your company sells portable housing to both general contractors and the government.It sells jobs to contractors on a bid basis.A contractor asks for three bids from different manufacturers. The combination of low bid and high quality wins the job.However, jobs sold to the government are bid on a cost-plus basis.This means price is determined by adding all costs plus a profit based on cost at a specified percent, such as 10%.You observe that the amount of overhead allocated to government jobs is higher than that allocated to contract jobs.These allocations concern you and motivate your memo.