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X = amount not exempt from overhead costs (ex: equipment)
Y = amount exempt from overhead costs (ex: Supplies)
R = overhead cost rate
In define, go to GB1 to find the Overhead/Indirect Cost/ Facilities and Administratative (OH/IC/F&A) Rate in the bottom right corner.
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3. Moving a specified maximum amount from a source subject to OH recovery to a an account that is not subject to OH recovery.
In this example, moving $5000 from supplies to equipment with a portion taken out of the $5,000 for indirect costs.
F&A (or OH) Rate: .485 or 48.5% R
Amount to transfer to supplies: $5,000 000 Y
Transfer from funding account to supply account: $5,000/1.485 = $3367 X
Transfer from indirect cost account: $3367*.485 = $1,633
Total transferred: $5,000
Y*(1+R) = X
4. Moving a specified amount from a source subject to OH recovery to a an account that is not subject to OH recovery.
In this example $5000 is to be moved from supplies to equipment.
F&A (or OH) Rate: .485 or 48.5% R
Amount to transfer from supplies: $5,000 X
Transfer to equipment: $5,000/1.485 = $3367 Y
Transfer to indirect cost account: $3367 x .485 = $1,
...
633
Total transferred: $5,000
Y= X/(1+R)