NOTES

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…

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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….

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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…

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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…

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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…

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