Chapter 4 outline

Chapter 4 outline - Chapter 4: 1. Departmental OH rates a....

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Chapter 4: 1. Departmental OH rates a. Four basic steps 1. Estimate the total manufacturing overhead (MOH) costs that will be incurred in each department in the coming year: departmental overhead cost pools. 2. Select an allocation base for each department and estimate the total amount that will be used during the year. 3. Calculate departmental overhead rates using the information estimated in Steps 1 and 2: Department overhead rate = Total estimated department overhead cost pool / Total estimated amount of the department allocation base 4. Allocate some MOH from each department to the individual jobs that use those departments. MOH allocated to job = Departmental overhead rate × Actual amount of departmental allocation base used by job 2. ABC a. Four basic steps 1. Identify primary activities and then estimate the total MOH costs associated with each activity: activity cost pools. 2. Select an allocation base for each activity and estimate the total amount that will be used during the year.
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This note was uploaded on 12/06/2011 for the course ACCT 2020 taught by Professor Lui during the Fall '08 term at North Texas.

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Chapter 4 outline - Chapter 4: 1. Departmental OH rates a....

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