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method of overhead absorption
Absorption method is that in which predetermined overhead rate is use to allocate all overheads to departments or activities.
Overhead absorption rate is calculated with following methods: 1 - Machine hours method 2 - Direct labor cost method 3 - Direct labor hours method
Departmentalisation of overhead means allocation of overhead cost base on predertmined rate in case of absorption method and based in activities in case of activity based costing.
Traditional costing is a method in accounting where the manufacturing overhead costs are allocated to the products manufactured. It is also called as conventional costing.
method of overhead absorption
In Blanket Overhead Absorption Rate applied is the same however it may differ if a company follow Departmental method Or frther break - up method
Absorption method is that in which predetermined overhead rate is use to allocate all overheads to departments or activities.
Overhead absorption rate is calculated with following methods: 1 - Machine hours method 2 - Direct labor cost method 3 - Direct labor hours method
i dnt know am also asking ths question
Departmentalisation of overhead means allocation of overhead cost base on predertmined rate in case of absorption method and based in activities in case of activity based costing.
Traditional costing is a method in accounting where the manufacturing overhead costs are allocated to the products manufactured. It is also called as conventional costing.
One method that accounts for all the overhead in a plant, for example, can be included in a single kind of overhead allocation.
Activity based costing allocate the overhead expenses based on activities performed and that's why it is an accurate way to allocate overhead expenses while in absorption costing, overheads are allocated based on some ratios or predetermined rate which is not accurate method of allocation of cost.
it can be treated 3 different Way as follows 1. carry forward next year of over and under absorption overhead 2. it is transfer to costing P\ L 3. adjusted supplementary rate on output------ in this method supplementary rate adj on sale unit , transfer to P\L DR and closing stock ,for determine future rate.
The traditional method of cost accounting assigns the indirect costs of the factory to the production machine hours, units produced, or the direct labor hours. The disadvantage of this method is that there are more factors that contribute to the overhead therefore making this method inadequate in determining the actual costs it takes to produce a product.
Atomic absorption spectrophotometry is a method in analytical chemistry.