CAS 403 - 3 Factor Formula Determination

(2) Residual expenses shall be allocated pursuant to 9904.403-50(c)(1) if the total amount of such expenses [residual] for the contractor's previous fiscal year (excluding any unallowable costs and before eliminating any amounts to be allocated in accordance with paragraph (c)(3) of this subsection) exceeds the amount (below) obtained by applying the following percentage(s) to the aggregate operating revenue of all segments for such previous year:

• 3.35 percent of the first $100 million;

• 0.95 percent of the next $200 million;

• 0.30 percent of the next $2.7 billion;

• 0.20 percent of all amounts over $3 billion.

The determination required by this paragraph for the 1st year the contractor is subject to this Standard shall be based on the pro forma application of this Standard to the home office expenses and aggregate operating revenue for the contractor's previous fiscal year

Exceptions

(3) Where a particular segment receives significantly more or less benefit from residual expenses than would be reflected by the allocation of such expenses pursuant to paragraph (c) (1) or (2) of this subsection (see 9904.403-50(d)), the Government and the contractor may agree to a special allocation of residual expenses to such segment commensurate with the benefits received. The amount of a special allocation to any segment made pursuant to such an agreement shall be excluded from the pool of residual expenses to be allocated pursuant to paragraph (c) (1) or (2) of this subsection, and such segment's data shall be excluded from the base used to allocate this pool..

Related Pages

Exceptions are permitted, see ... CAS 403 - Allocation of Home Office Expenses to Segments