Nama : Yuyun Ekawati

NIM. : 041911233152

FACTORY OVERHEAD ( DEPARTMENTALIZATION,PLANNED,ACTUAL,AND APPLIED)

Factory overhead is generally defined as indirect materials, indirect labor , and all other factory costs
that cannot be conveniently identified with or charged directly to a specific jobs lots, product, or other
final cost objects. Other term used for factory overhead are factory burden, production overhead,
indirect production costs, manufacturing expense, manufacturing overhead, factory expense, and
indirect manufacturing costs.

Factory overhead has two characteristics that require consideration if products are to be charged with a
reasonable amount of this costs. The characteristics deal with overhead's relationship to the product
and to the volume of production. Unlike direct material and direct labor, overhead is an invisible part of
the finished product. There is no material requisition or labor time ticket to indicate the amount of
overhead that’s enter into a job or product.

DEPARTMENTALIZATION

Departmentalization of factory overhead means diving the plant into segments, called department, to
which overhead costs are charged. For accounting purposes , dividing a plant into separate provides
improved product costing and promotes responsible control of overhead costs.

Producing and Service Department

A producing department manufactures the product by changing the form of material or by assembling
parts. A service department renders a service that contributes in an indirect way to the manufacture of
the product but does not change form, assembly, or nature of the material.

Producing : cutting, planning , assembly, finishing, machining ,cooking,etc.

Service : utilities, receiving, inspection, storage , security, purchasing, shipping, etc.

Direct Departmental Costs

Direct departmental costa is factory overhead consist of all production costs not traceable to specific
jobs or product. But in attributing costs to department, it is important to keep in mind that department
tend to be relatively large areas within a company. As a result, many factory overhead costs are
traceable to a specific department. The majority of direct department overhead costs can be divided
into the following category:

1. Supervising, indirect labor, and overtime

2. Labor fringe benefits
3. Indirect materials and supplies
4. Repairs and maintenance
5. Equipment depreciation and rent
Indirect departmental Cost

Costs such as power, light , rents and depreciation of plant buildings, when shared by all departments
are not charged directly to a department. These costs do not originate with any specific department.
They are incurred for the benefit of all departments, so their cost is allocated among all departments.

Some of the indirect departmental expenses that require allocation among departments, together most
commonly used, include the following:

1. Square footage: building rent, property tax, depreciation-building, fire insurance, building
repairs, gas utility, fixed portion of electricity.
2. Number of employees : superintendence, telephone or telegraph
3. Department payroll : worker's compensation insurance
4. Kilowatt hours : variable portion of electricity