Читать книгу Cost Accounting For Dummies - Kenneth W. Boyd - Страница 34

To allocate overhead, you need to compute a rate or amount of cost per product. Assume you lease the building where you manufacture the cotton gloves. Obviously, the reason you’re leasing the building is to make gloves.

You can’t trace the cost of the lease to any particular pair of gloves. The cost belongs to all the gloves, yet the cost does need to be included in the cost of a single unit of your product. That way, you can determine the price and profit for one unit (one glove).

It’s worth mentioning again and again: Every cost must be attached (traced or allocated) to a product or service that is sold.

One way to allocate overhead is to base it on some level of activity. As you see later in Chapter 5, activities in your business cause you to incur costs. Assume you run a machine for 1,000 hours a year and pay $2,000 for the repair and maintenance on the machine. You could allocate the repair cost to each hour of machine time as $2,000 ÷ 1,000 hours, or $2 per machine hour.