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SP 70 70 70 70
US 8400 10000 12000 13000
Sales Value 588000 700000 840000 910000
production units
Total prod cost 60
RM COST 10
DL COST 30
INDIRECT MANUF COST 20 you will allocate 10 or 15 dollars of ifc
tool to calculate so its not a value or price
Gross margin = sales value-cogs
imp formulas
calculation of production units. Raw materials. Cash collections. Account rec. payments for. Accounts payable
explain what the overhead allocation rate is
we are considering indirect cost
focus on q11 the allocation rate is a tool to calculate the indirect cost pe
ex: if the allocation base is the total amount of sales the al
WHEN THE ALLOCATION RATE IS 15$ / DIRECT LABOR HOU
to calculate the indirect cost per product= total infirect fixed costs/ total allocation base units.
the total amount of sales the allocation rate will be calculated = total ifc/ total sales
ATE IS 15$ / DIRECT LABOR HOUR IT MEANS THAT EACH DIRECT LABOR HOUR WILL INCCURR 15 DOLLARS OF IFC, IT DOESN’T MEAN THA
S OF IFC, IT DOESN’T MEAN THAT EACH DIRECT LABOR HOUR IS GOING TO INCCURR 15$ IT MEANS WERE GONNA CALCULATE 15 DOLLAR
GONNA CALCULATE 15 DOLLARS OF IFC FOR EACH DIRECT LABOR HOUR