Factory overhead is also known as manufacturing overhead. It is not direct overhead like labor cost, raw material purchase cost, etc. It is an indirect cost which is essential for factory to run and raw material to convert into finished goods. It plays an important role in determining the cost of finished goods.
Examples of factory overhead are: –
- Depreciation of the equipment
- Rent of the factory building
- Depreciation of the office building
- Supervisorâ€™s salary
- Expenses spend on quality check of the finished good
- Expenses on quality control department
- Salary of sweeper, cleaner and bathroom cleaner
- Expenses on maintenance of equipment
- Fuel of the equipment
- Other factory indirect expenses
It is very difficult for the accountant to locate and note down a number of expenses, so they allocate the expense department wise. It is wrong in some sense, manuals asunder absorption and over absorption of factory overheads homework answers will guide accountant regarding finding the real value of overhead.
Manuals as under absorption and over absorption of factory overheads homework answers will help the strategic team employees to locate more examples of factory overhead which is currently happening in their company. They will also provide ways to reduce it.
What are under absorbed and over absorbed associated factors?
Companies assign some expense budget for manufacturing overhead. These manufacturing expenses budget is further divided into various departments. But variation is always possible. If the amount of the expense budget allocated is greater than the actual overhead occurred than it is over-absorbed but if the amount of the expense budget allocated to the department is less than the actual overhead expense occurred than it is an under absorbed case.
Under absorption and over absorption of factory overheads homework answers can show you the reason of under absorption and over absorption of the factory overheads
- Amount of budget prediction is wrong
- Variation in working hours, for example,some people are working on even Sundays and Saturdays, so the electricity bill also goes higher as compared to what it is expected. Also because of excessive holidays in a number of month, people operated in the factory is less and it results into less consumption than expected.
- Nothing can be standardized. Because of electricity failure, factory needs to book a generator and now overhead cost increases.
- The strategic team is not capable enough to conduct the survey and work accordingly to allocate the budget. Under absorption and over absorption of factory overheads homework answers will help in guiding the strategic team to allocate the budget correctly which is near to correct figure.
Under absorption and over absorption of factory overheads homework answers will help in guiding the employees as per the requirements. The notes are extremely student friendly as well as suitable for executive levels, which the strategic team can refer while deciding the parameters.
How this manual acts as a win-win situation for both company and employee?
Under absorption and over absorption of factory overheads homework answers provide notes and online session to the candidates who require guidance regarding budget allocation and understanding of under absorption and over absorption of factory overhead. The employee does not have time to study these details, but they are very important in nature.
Now when under absorption and over absorption of factory overheads homework answers will provide those notes and online session, they can implement their theoretical knowledge to practical work now. On the job training is better for both employee and company as they will work for the company and help in raising profit and employee will also get salary.
For the company, their profit will increase as the budget allocation will be proper, so now the cash allocation can be done for better place which can provide better profit to the company.
Also, employee need not travel to any place, they will get everything which can enrich their knowledge and thus give new height to their career path. It plays an important role in shaping their career and companyâ€™s goodwill also increases manifold as employee will always feel grateful to the company as they provide the service of the course for overhead studies. It is very important expense for any factory.
Employeeâ€™s status will increase manifold. He/she can easily grab a good opportunity in the market as they are precious to the sector. Their knowledge can save cash flow in important projects rather than on expense. If company can receive more cash flow for the project rather than on the expenses, they will handle projects on a large scale and they can handle it efficiently also. This project handling can bring more prosperity to the company, and it will also bring more projects as a result.
Help from such services:
In this way this homework answer act as a win-win to both employee and company. Goodwill of the company will increase. Also,employee will tell the public that the company thinks about employeeâ€™s future and provide course and study material to shape their career.
This will generate goodwill among the public also, and they will start looking for getting employed in the company. The share price of the company will increase and their balance sheet too. In balance sheet, goodwill also occupies a specific place, and when it increases, the balance sheet of the company also increases.
Thus, if you have still not checked out details associated with such manuals, it is best that you refer to under absorption and over absorption of factory overheads homework answers and get the best answers!