What are overheads
Product cost is primarily consist of three element i.e Direct material , Direct Labour and production overheads. Production overheads basically are indirect cost.
What are Examples of Production overheads
The famous examples of Production overheads are factory rent, supervision cost, Depreciation of plant and Machinery , Factory Lightening.
How Factory overhead are Charged
Factory overheads charged to the product on the bases of absorption rate which is calculated by the management based on the historical data and experience of management.
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