If you buy $10,000 worth of raw materials to make 1,000 items, it's easy to see you spent $10 on raw materials per widget. Allocating how much management salaries, utilities or rent you spent on each ...

Identify cost driver for the overhead cost, and the total amount of cost driver in a multi-product production or multi-service offering. A cost driver is a business activity responsible for change in ...

There are many costs associated with running a business, but all of those costs don’t fall into the same bucket. One type is overhead costs, which are expenses not tied directly to the production of a ...

The overhead ratio measures how much of a company's total revenue is spent on indirect costs. This metric is useful for identifying areas where costs can be reduced to improve profitability. Analyzing ...

As a former corporate controller and senior vice president of operations, I have experienced both sides of allocated overhead. I have learned manufacturing executives have more control over costs ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Costing is often a very confusing and frustrating topic with its standard costs, variable costs, fixed costs, marginal costs, budgeted costs, actual costs, relevant costs, etc. Why compound the ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...