Factory Overhead Costs Homework Help
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What are Factory Overheads?
In an industry a product is manufactured through a process that is predefined for it. For example a car is supposed to be made by assembling the various parts of it and those parts are separately manufactured in hubs. Factory overheads are the cost that these processes occupy in order to supply a finished product. These factory overhead costs do not include any type of material cost or labor cost, but just the processing. In this article for Factory Overhead Costs homework Help we discuss the details about it.
Importance of Factory Overheads
Also known as manufacturing overheads, factory overheads involves an industry’s functioning to finish a product. Usually factory overheads are classified under the category of indirect costs. The material cost and labor costs are usually included when the cost of products for evaluation of inventory and deciding of a price for a product is required. Some fine examples of factory overheads compiled by our Factory Overhead Costs homework Help writers can be
• Production supervisor salaries
• Quality assurance salaries
• Materials management salaries
• Factory rent
• Factory utilities
• Factory building insurance
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Methods of Absorption of Factory Overheads
The following procedures defined by factory overheads homework help article writers define the various steps taken in the absorption of overheads.
1. The direct material cost basis: also known as the percentage on material basis, here the past estimates of cost find out the percentage of factory overheads.
2. The direct labor cost basis: in this article for factory overheads homework help this procedure also termed as the percentage on direct wages method.
3. The percentage on prime cost basis: material and labor are two important factors to raise the overheads and if two jobs are taken, then unusual to time they take to complete, same overhead are defined in their favor as our factory overheads homework help article defines.
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