205k views
1 vote
Why must a company estimate the amount of factory overhead assigned to individual jobs or job lots?

1 Answer

3 votes
The actual company of overhead is unknown until the job or jobs are done. The managerial decision impacts the accuracy with which overhead costs are distributed to individual jobs. In opportunity, the cost of individual jobs might influence a manager’s decisions for pricing or performance assessment. In order to account factory overhead cost it must record other overhead costs incurred during the month and apply overhead costs to production departments at a certain percentage of direct labor cost.
User Kerbie
by
6.2k points