The total budgeted costs in an indirect-cost pool divided by the total budgeted quantity of cost-allocation base.
For example: Manufacturing overhead = 900.000 and 25.000 machine hours.
--> 900.000/25.000 = 36 dollar per machine hour
You add all the costs together that are related to the manufacturing process. An example of something included would be electricity for the manufacturing floor, something excluded would be CEO's auto allowance. You then divide by what your cost driver is...(machine hours, direct labor hours, etc..) that gives you an overhead cost per.
What arguments are there in favor of treating fixed manufacturing overhead costs as product costs? As period costs?
It means you have incurred more actual manufacturing overhead costs than you have applied to your products (i.e., manufacturing overhead is underapplied).
Salary of factory manager is Manufacturing overhead. and Manufacturing overhead is Product costs. So, It's not period cost.
If the estimated materials, labor or overhead costs allocated for a manufacturing order is different from the actual cost of the MO then the potential result is a Manufacturing Overhead Variance.
Overheads costs are indirect manufacturing costs which are not directly allocatable to units of products.
Assume you have manufacturing overhead 5,000Journal Entry would be:Dr. Work in Process ---------5,000Cr. Manufacturing Overhead ----------5,000
it is direct labor plus overhead costs
plant overhead cost, also called manufacturing overhead or factory burden, is the total cost involved in operating all production facilities of a manufacturing business. It generally applies to indirect labor and indirect cost, it also includes all costs involved in manufacturing with the exception of the cost of raw materials and direct labor. Factory overhead also includes certain costs such as quality assurance costs, cleanup costs, and property insurance premiums
plant overhead cost, also called manufacturing overhead or factory burden, is the total cost involved in operating all production facilities of a manufacturing business. It generally applies to indirect labor and indirect cost, it also includes all costs involved in manufacturing with the exception of the cost of raw materials and direct labor. Factory overhead also includes certain costs such as quality assurance costs, cleanup costs, and property insurance premiums
a retail
Pricing is based on direct labor and overhead. Materials does not affect pricing. Example: Your customer provides materials used in production.
False