Also referred to as factory burden, factory overhead, indirect manufacturing costs, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
Also referred to as factory burden, factory overhead, indirect manufacturing costs, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
Also referred to as manufacturing overhead, factory overhead, indirect manufacturing costs, or manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
Also referred to as manufacturing overhead, factory burden, factory overhead, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
Also referred to as manufacturing overhead, indirect manufacturing costs, factory burden, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
Our Explanation of Manufacturing Overhead gives you examples of what is included in manufacturing overhead. You will learn that these are indirect product costs and therefore are allocated to the products in order to...
What is the death spiral? Author: Harold Averkamp, CPA, MBA Definition of Death Spiral In cost accounting and managerial accounting, the term death spiral refers to the repeated elimination of a manufacturer’s products...
Direct materials, direct labor and manufacturing overhead costs. Also referred to as product costs, production costs, and inventoriable costs.
financial statements to comply with U.S. GAAP. The resulting unit costs are used for inventory valuation and for the calculation of the cost of goods sold. Example of Manufacturing Costs Manufacturing costs are...
overhead, factory overhead, factory burden, or burden. US GAAP requires that indirect manufacturing costs be allocated to, assigned to, or absorbed by the manufacturer’s output (in addition to the cost of direct...
Support that has been either temporarily or permanently restricted by the donor.
department. The departmentalizing of manufacturing overhead costs also allows for the computation and application of several departmental overhead cost rates instead of having a single, plant-wide overhead rate. This is...
What is the difference between prime costs and conversion costs? Author: Harold Averkamp, CPA, MBA Cost Categories of a Manufactured Product Prime costs and conversion costs pertain to the three cost categories of a...
. True Right! False Wrong. 7. Only direct manufacturing costs are assigned to inventories and cost of goods sold. True Wrong. False Right! 8. Commissions paid to sell products are reported as part of the cost of goods...
What is absorption costing? Author: Harold Averkamp, CPA, MBA Definition of Absorption Costing Absorption costing (also known as full absorption costing) indicates that all of the manufacturing costs have been assigned...
Our Explanation of Nonmanufacturing Overhead provides examples of a manufacturer's expenses which are not considered to be costs of a product for financial reporting. However, they are operating expenses that will have...
will be the direct materials, direct labor, and manufacturing overhead used to manufacture a product. Definition of Period Costs Period costs are expenses that will be reported on the income statement without ever...
What is a predetermined overhead rate? Author: Harold Averkamp, CPA, MBA Definition of Predetermined Overhead Rate A predetermined overhead rate is often an annual rate used to assign or allocate indirect manufacturing...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
are also known as factory overhead costs, burden, indirect manufacturing costs, and indirect product costs. Since manufacturing overhead is an indirect product cost, it needs to be allocated or assigned to the products...
but actual SG&A expenses were $232,000. The result was a favorable SG&A expense budget variance of $8,000. Manufacturing overhead costs were budgeted to be $400,000 but were actually $393,000. The result was a...
One of two broad functional categories for sorting and reporting a nonprofit organization’s expenses. (The other is program expenses.) Supporting services expenses consists of 1) management and general expenses,...
What do overabsorbed and underabsorbed mean? Author: Harold Averkamp, CPA, MBA Definition of Overabsorbed and Underabsorbed In cost accounting, overabsorbed and underabsorbed pertain to a manufacturer’s manufacturing...
Can absorption costing cause an increase in net income? Author: Harold Averkamp, CPA, MBA Definition of Absorption Costing Absorption costing is a cost accounting method (required by US GAAP) in which a manufacturer must...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
What is the difference between product costs and period costs? Author: Harold Averkamp, CPA, MBA A manufacturer’s product costs are the direct materials, direct labor, and manufacturing overhead used in making its...
in the manufacturing facilities other than the costs of direct materials and direct labor. Hence, manufacturing overhead is referred to as an indirect cost. Generally accepted accounting principles require that a...
to the products manufactured. This is required because U.S. accounting principles and income tax regulations require manufacturers to follow full absorption costing. This means that the cost of manufactured goods must...
manufacturing overhead. These accountants do not include selling, administrative, or interest costs in their definition of the full cost of a product. Their view is consistent with the way that inventory and the cost of...
object is a company’s product that is being manufactured, the cost of the product’s raw materials and the cost of the employees on the assembly line are direct costs since they are directly traceable to the product....
Our Explanation of Manufacturing Overhead gives you examples of what is included in manufacturing overhead. You will learn that these are indirect product costs and therefore are allocated to the products in order to...
Manufacturing Overhead Author: Harold Averkamp, CPA, MBA 90 Q&A Popular Recent What is manufacturing overhead and what does it include? What is a flexible budget? What is absorption costing? What is the difference...
What are conversion costs? Author: Harold Averkamp, CPA, MBA Definition of Conversion Costs Conversion costs is a term used in cost accounting that represents the combination of direct labor costs and manufacturing...
How can a manufacturer determine the precise cost of its products? Author: Harold Averkamp, CPA, MBA A manufacturer may never be able to determine the precise cost of its individual products. The reason is that most of...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
manufacturing costs are predominantly assigned on the basis of direct machine hours. True Wrong. False Right! 3. Which of the following would not be included in a product's cost for inventory valuation for the...
and the total overhead cost was $100,000. If the range of these MHs (6,000 to 10,000) are not outside the range of normal activity, we know by definition that the fixed manufacturing costs will not change in this range...
What is a cost driver? Author: Harold Averkamp, CPA, MBA Ideally, a cost driver is an activity that is the root cause of why a cost occurs. In the past century, the root cause of indirect manufacturing costs has changed...
The situation where a company has assigned less manufacturing overhead than the amount actually incurred.
Featured Review
"As a trainer/lecturer of English for Specific Purposes with a focus on Financial and Business English, AccountingCoach.com is THE website I recommend to my students. They are speakers of other languages and AccountingCouch.com makes the world of finance and Accounting in English accessible to them. They need nothing more to convince themselves of accounting and finance terminology. This is their go-to resource. Apart from improving their English levels, professionally they gain insight as well. They are getting core information, updates, and learn about trends. To this effect many students have commented. Your website is also a tremendous support to me when it comes to doing quizzes, finding material to improve reading skills and when setting exam papers. And all of that for free! Thank you Mr Averkamp. For sharing your knowledge, for making such a contribution to education, for reaching students across the globe. You are changing the world. With sincere gratitude!" - Trudie F.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: