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Factory overheads are incurred only and only due to production of the goods. That is why the factory overhead cost is applied to production.
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∙ 11y ago
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What is Input cost of supply?
cost of direct material, direct labor, and other overhead items devoted to the production of a good or service.
Is cloth used in drapery production a fixed cost?
Since the final product is the value added drapery, raw cloth is evidently an input. Further, it is clearly a variable input as its quantity utilized is derived from production targets. Simply, the cloth used in production will be treated as a variable cost. The fixed costs for this business would be those related to the plant and machinery used in the process, the factory overhead cost allocation and other cost of this nature, that are fixed regardless of the production level. All costs that vary with the production level will be variable costs. Sabdezar Ilahi
How is the total cost of a factory or other production site determined?
Fixed costs plus variable costs.
What term describes the cost of producing one more unit of output?
Where production is already under way, the term "marginal" is applied to the cost of additional products.
What is the meaning of fixed cost in economics?
the cost which is not change with production fixed cost example rent of factory , employee salaries in case of manufacturing unit , fixed electricity charge etc.
Is overhead applied after the period?
Overhead is applied at start of production to calculate the cost of goods manufactured and to determine the total cost and profit as well.
What is purpose of factory overhead applied and how this information can use by the cost accountant in minimum the cost of the product?
Factory overhead is what it costs to run the factory. The cost accountant can look at the cost of overhead to find ways to minimize it, resulting in the cost of the product being lower.
Is factory heating costs classified as a product cost or period cost?
Factory heating cost is overhead cost and part of product cost as if there is no production there is no factory heating requires.
Why you charge production at pre determined factory overhead rate?
The predetermined factory overhead rate is the cost associated with all products produced by the company. This helps the company easily assign cost.
What is an overhead?
An overhead is a cost that is not directly related to the production of a specific good or service but that is indirectly related to the production of several goods or services. For example, the cost of maintaining an office or factory - lighting, heating etc.
What is the Difference between actual overhead costs and overhead costs applied?
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.
Differentiate prime cost and production overhead?
Prime cost includes direct material and direct labor without which no goods can be manufactured while production overhead is that other cost which is not directly identifiable with product but which is required to run factory operations.
Are cafeteria costs for the factory a period cost?
No. They are a product cost/factory overhead cost
Is salary of factory manager a period cost?
Salary of factory manager is Manufacturing overhead. and Manufacturing overhead is Product costs. So, It's not period cost.
In a process costing system what account is debited when manufacturing overhead costs are applied to the cost of production?
the finished goods inventroy account
Is factory manager wages direct labor costs?
Factory manager is not directly related to the production of units of product so it is not direct labor cost but it is included in overhead costs.
Is depreciation of factory plant and equipment a factory overhead cost?
YES
