This publication presents a system of gathering overhead data and describes several methods for assigning overhead costs to specific contract prices. It is intended to provide facility production supervisors with a means of ensuring adequate cost recovery in bid prices and gaining a measure of overhead cost control. The seven steps in the overhead determination system are outlined: (1) define cost centers, (2) define direct and indirect costs, (3) determine each cost center allocation basis, (4) collect overhead expenditures into pools, (5) allocate overhead expenditures to cost centers, (6) determine cost center overhead rates, and (7) apply overhead rates to products and services. Each step is examined using a facility example. The example facility, given the fictitious name, Rehabilitation Services, Inc., is assumed to be a multidepartment facility providing many service options for persons with disabling conditions. The entire system is presented in a decision-making flow chart found at the end of the manual. A bibliography is appended. (YLB)