The best way to predict your overhead costs is to track these costs on a monthly basis. Fixed costs are those that remain the same even when production or sales volume changes. So if your business is selling more products, you’ll still be paying the same amount in rent. Indirect costs are those that cannot...Read More

This rate is used to allocate or apply overhead costs to products or services. The common allocation bases are direct labor hours, direct labor cost, machine hours, and direct materials. Hence, it is essential to use rates that determine how much of the overhead costs are applied to each unit of production output. This is...Read More