Thursday, 15 June 2017

Factory Overhead costs

Factory Overhead costs

A Factory overhead is the costs incurred during the manufacturing process, not including the costs of direct labor and direct materials. Because manufacturing overhead is an indirect cost, accountants are faced with the task of assigning or allocating overhead costs to each of the units produced.

As it known that the issue of costs is very in need for the survival of a company. No cost, then the company will not be able to run her business activities properly, can even impede on the company to obtain a finished product, to market right to the consumer with a profit target maximum.

To overcome so that the company can obtain an item having no inhibitions and can even affect also the survival of a company, then the necessary cost of products used for produces a finished product. But basically the cost of that exited 's company in producing a production so with maximum profits may also often experience a shortage and excess towards the cost production used in processing a product.

Thus, it then needed a standard cost in a target produces a product with maximum profit. Where the standard cost is a tool cost control in the process of production of the finished goods. For we know in producing a product by issuing a relatively large production cost value. To make it more favorable to the company's standard cost is required so that the cost can be more efficient.

The development of rapid productions by itself had a substantial role as a support against the company can even be said that the right production system will provide a positive impact on the development and the company's progress as we know that the goal and every company is for a product to be marketed to consumers with the most earnings targets in relation to the above description, then the production problems It can be said the main problem in the industrial enterprises which should be noticed by every company because the leadership failure in producing raw materials into the finished product will result in the company not obtained a number of funds to finance operations so as inhibit marketing issues for purchases in the company concerned and Furthermore the issue of personnel within the company.

To support the implementation of production within a company so that it can support the survival, then the necessary production costs, which are costs incurred by the company to manage material raw be product. One of the charges became a point of discussion was the staple in the staple factory overhead costs are all production in addition to the ingredients raw and direct labor cost. The cost of the overload factory is composed of material helpers indirect labor costs and other indirect production costs.

The definition above, can be drawn the conclusion that overhead costs are all the costs of production in addition to the ingredients raw is not direct and indirect labor cost factory overhead costs consist of the costs of material cost and helper indirect labor and indirect production costs more.

Furthermore, the sense of a factory overhead costs are factory overhead costs are all costs that are used to create a finished goods other than direct materials and direct labor wage. In this sense the factory overhead costs including the cost of indirect materials and indirect labor costs.

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