Paper instructions:
One method of costing a product is called total costing. Explain how overhead (non production) costs may be absorbed into the cost of each product.
One method of costing a product is called total costing. Explain how overhead (non production) costs may be absorbed into the cost of each product.
Basic Information to help:
1) apportion -> cost centre -> various basis of apportionment; dependent on the nature of the costs e.g.
2) Recalculate overhead absorption rates(OAR) – Which is…..
This is done by dividing the total cost of the cost centre by the time product spends in the cost centre
3)Cost for each unit is determined by multiplying OAR by time spent per unit of production.
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2) Recalculate overhead absorption rates(OAR) – Which is…..
This is done by dividing the total cost of the cost centre by the time product spends in the cost centre
3)Cost for each unit is determined by multiplying OAR by time spent per unit of production.
FOR MORE INFORMATION ON THIS TOPIC CLICK HERE
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