Among the many methods that have been adopted to apply overhead to production, the most common ones have been dealt below:- 1. Percentage of Direct Labour Cost. 2. Percentage of Direct Material Cost. 3. Prime Cost Percentage Rate. 4. Labour Hour Rate. 5. Machine Hour Rate. 6. Production Unit Method. Method # 1. Percentage of Direct Labour Cost: This method [...]
After reading this article you will learn about:- 1. Meaning of Standard Cost 2. Determination of Standard Costs 3. Advantages. Meaning of Standard Cost: It is the pre-determined cost of a product. After compiling different expenses, an estimated cost of product is forecasted, which is known as “Standard cost”. It is used as a device to check and lower overhead [...]
After reading this article you will learn about:- 1. Meaning of Costing 2. Aims of Costing 3. Methods 4. Advantages. Meaning of Costing: Costing has been defined by the Institute of Cost and Works Accountants, England as: "The technique and process of ascertaining costs." Whereas, Wheldon has defined the costing as: "Costing is the classifying, recording and appropriate allocation of [...]