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ABSORPTION OF OVERHEADS Absorption of overheads refers to the process of recovering allocated cost to a particular cost centre by the units produced in that cost centre. Absorption of Overheads means the distribution of the overhead expenses allotted to a particular department over the units produced in that department. Overhead absorption is accomplished by overhead…
DIFFERENCE BETWEEN ALLOCATION AND APPORTIONMENT OF OVERHEADS The difference between Allocation and Apportionment of overheads is as follows: ALLOCATION OF OVERHEADS Allocation is the process of identification of overheads with cost centers. An expense which is directly identifiable with a specific cost centre is allocated to that centre. Thus it is allotment of a whole…
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Allocation and Apportionment of overheads is also known as departmentalization of overheads. ALLOCATION OF OVERHEADS Allocation is the process of identification of overheads with cost centers. An expense which is directly identifiable with a specific cost centre is allocated to that centre. Thus it is allotment of a whole item of cost to a cost…
LABOR TURNOVER Labor Turnover of an organization is change in the labor force during a specified period measured against a suitable index. Labor turnover is the ratio of the number of persons leaving in a period to the average number employed. It is the change in the composition of the labor force in an organization….
OPERATIONS RESEARCH Operations research (OR) is an analytical method of problem-solving and decision-making that is useful in the management of organizations. In operations research, problems are broken down into basic components and then solved in defined steps by mathematical analysis. The concept of OR arose during World War II by military planners. After the war,…
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COST CENTRE Cost Centre is a department or function within an organization that does not directly add to profit but still costs the organization money to operate. Cost centers only contribute to a company’s profitability indirectly. A cost center can be defined at a smaller level than a department. It could involve a particular job…
DIFFERENCE BETWEEN TIME RATE SYSTEM AND PIECE RATE SYSTEM BASIS OF DIFFERENCE TIME RATE SYSTEM PIECE RATE SYSTEM MEANING Time rate system is a method of wage payment to workers based on time spent by them for the production of output. Piece rate system is a method of wage payment to workers based on the…
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SYSTEM OF WAGE PAYMENT IN COST ACCOUNTING WAGES Before understanding system of wage payment in cost accounting, get to know What is Wage? A wage is monetary compensation paid by an employer to an employee in exchange for work done. Payment may be calculated as a fixed amount for each task completed or at an hourly or daily rate, or based…
IDLE TIME Idle time means the amount of time the workers remain idle in a normal working day. It is that time for which the employer pays, but from which he obtains no production. In other words, idle time is the difference between the time shown by the time card and job card. The idle…
REMEDIES FOR BREACH OF CONTRACT A contract is a legal document that binds all the parties to perform as it is enforceable by law. If any of party refuses to perform his obligation on his part, then it is known as Breach of the contract. As the contract is entered into for the benefit of…
