What is the formula for calculating total overhead
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What is the formula for calculating total overhead
All expenses of manufacture other than
Materials and labour divided by turnover
Of manufactured goods.
The rate can be got at per dollar of manufacture.
The total can be applied to the Cost of Goods
Manufactured.
There isn't a formula for overhead. What accounts are you looking at, then I can tell you which are overhead...
There are many formulas for overhead!
I just came across a new one from
One of the questions here:-
Manufacturing overhead was applied at the rate of 150% of direct labor cost.
I would call that an overhead allocation rate. I thought he was talking about calculating total overhead.
Because overhead is many different things if you are trying to calculate the total there is no one formula. I guess I misread the question, if you are talking about allocating overhead there are many different ways and formulas involved. No sense in arguing semantics though.
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