Want this question answered?
Overhead refers to the cost of a business in a particular period. Specifically, overhead points to fixed and indirect costs. They are non-labor costs. Non-labor costs are variable or fixed. Rent and salaries are examples of fixed costs. Advertising and supplies are variable costs.
it doens't
The difference between Overhead & G&A is as follows: Overhead is always a fixed cost...such as rent. G&A (Stands for General and Administrative) so therefore all general and administrative costs go here....such a supervisor salary. G&A can have cost controls implemented into them...the fixed costs are set (usually in stone). http://www.xsellence.com
Direct labor are not part of overhead costs and shown separately while indirect labor are part of overhead costs and included in overhead cost because those labor cannot be allocated separately or identifiable separately.
What arguments are there in favor of treating fixed manufacturing overhead costs as product costs? As period costs?
Overhead refers to the cost of a business in a particular period. Specifically, overhead points to fixed and indirect costs. They are non-labor costs. Non-labor costs are variable or fixed. Rent and salaries are examples of fixed costs. Advertising and supplies are variable costs.
An overhead cost is anything that costs the business money to run, other than the costs of the products being sold. Some examples of overhead costs in a culinary business would be the buildings rent, cooking equipment, tables, chairs, etc.
it doens't
The difference between Overhead & G&A is as follows: Overhead is always a fixed cost...such as rent. G&A (Stands for General and Administrative) so therefore all general and administrative costs go here....such a supervisor salary. G&A can have cost controls implemented into them...the fixed costs are set (usually in stone). http://www.xsellence.com
Direct labor are not part of overhead costs and shown separately while indirect labor are part of overhead costs and included in overhead cost because those labor cannot be allocated separately or identifiable separately.
What arguments are there in favor of treating fixed manufacturing overhead costs as product costs? As period costs?
Incorporating departmental overhead costs in your prices helps you cover the costs of production. Unfortunately, it may make your price more than your competitors.
it is direct labor plus overhead costs
In managerial accounting, a cost added on to the direct costs of production in order to more accurately assess the profitability of each product. Overhead costs are all costs that are not directly related to the production of the good to be sold. These include administrative salaries, the costs of the building or machinery, commissions to salespeople, and many other items. To allocate these costs, an overhead rate is applied that spreads the overhead costs around depending on how much resources a product or activity used. For example, overhead costs may be applied at a set rate based on the number of machine hours required for the product. In more complicated cases, a combination of several cost drivers may be used to approximate overhead costs.
The Actual overhead is calculated throughout the Production cycle for indirect cost associated to the production and the overhead costs applied is based on the fixed rate assigned against the machine or labour hours to be calculated for the difference b/w two are called under or over applied.
Overheads costs are indirect manufacturing costs which are not directly allocatable to units of products.
Examples are Sunk Costs, Fixed costs and Allocated Costs.