STUDY TO ENLIGHTEN YOURSELF
OVER ABSORPTION AND UNDER ABSORPTION OF OVERHEADS Overhead expenses are usually applied to production on the basis of predetermined rates. The predetermined rates may represent estimated, actual or normal costs. If the actual expenses fall short of the amount applied, there is said to be an over-absorption of overheads, and, conversely, if the actual expenses…
Read More “OVER ABSORPTION AND UNDER ABSORPTION OF OVERHEADS” »
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…
Read More “ABSORPTION OF OVERHEADS” »
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…
Read More “DIFFERENCE BETWEEN ALLOCATION AND APPORTIONMENT OF OVERHEADS” »
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…
Read More “ALLOCATION AND APPORTIONMENT OF OVERHEADS” »
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,…
Read More “OPERATIONS RESEARCH FOR B.COM, BBA, M.COM & MBA” »
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…
Read More “DIFFERENCE BETWEEN TIME RATE SYSTEM AND PIECE RATE SYSTEM” »
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…
Read More “SYSTEM OF WAGE PAYMENT IN COST ACCOUNTING” »
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…
Read More “ACCOUNTING TREATMENT OF IDLE TIME” »
