ABSTRACT

A major problem associated with software cost studies is the lack of generally accepted accounting practices for determining the burden rate or overhead costs that are added to basic salaries to create a metric called the fully burdened salary rate that corporations use for determining business topics such as the charge-out rates for cost centers. One of the major gaps in the software literature, and for that matter in the accounting literature, is the almost total lack of international comparisons of the typical burden rate methodologies used in various countries. Unfortunately, the software literature is almost silent on the topic of burden or overhead rates. Indeed, many of the articles on software costs not only fail to detail the factors included in burden rates, but often fail to even state whether the burden rate itself was used in deriving the costs that the articles are discussing.