Overhead Costing Formula

[wp_ad_camp_1]

Factory Overhead Rate:
(i) Direct Material Cost Method =Amount of Factory Overheads ÷ Cost of Direct materials used x 100
(ii) Direct Labour Cost Method = Amount of Factory Overheads ÷ Cost of direct labour x 100
(iii) Prime Cost Method = Amount of Factory overheads ÷ Prime cost x 100
(iv)
(i) Machine SHour Rate Method = Amount of Factory overheads ÷ Machine Hours
(ii) Labour Hour Rate Method = Amount of Factory overheads ÷ Total Number of direct labour hours

Office Overhead Rates:
(i) As a Percentage of Factory Cost = Total Administration Overheads ÷ Total factory cost x 100
(ii) As a Percentage to Factory Overheads = Total Administration Overheads ÷ Total Factory Overheads* x 100
(iii) As a Percentage to Sales = Administration Overheads ÷ Total sales x 100
(iv) As a Percentage of Conversion Cost = Total Administration Overheads ÷ Total Conversion Cost x 100
(v) As a Percentage of Gross Profit = Total Administration Overheads ÷ Gross Profit x 100

Selling Overhead Rate:
(i) As a Rate Per Article = Total selling & Distribution Overheads ÷ Number of Products sold
(ii) As a Percentage of Selling Price = Total Selling & Distribution Overheads ÷ Total Sales x 100
(iii) As a Percentage of Works Cost = Total Selling & Distribution Overheads ÷ Total Works Cost x 100

[wp_ad_camp_2]

Leave a Reply

Your email address will not be published. Required fields are marked *