Overhead rate
This query is : Resolved
Saurabh tambat
(Querist)
12 July 2021
One question related to blanket overhead rate ....
Assume there are two departments , dept. A ( absorbing overheads on Direct material cost basis) and dept. B ( absorbing overheads on direct labour cost basis). Is it possible to divide *total overheads of entire factory* by the *SUM of DM cost of dept A and DL cost of dept B* to get blanket overhead rate ? If not, why not ?
Assume there are two departments , dept. A ( absorbing overheads on Direct material cost basis) and dept. B ( absorbing overheads on direct labour cost basis). Is it possible to divide *total overheads of entire factory* by the *SUM of DM cost of dept A and DL cost of dept B* to get blanket overhead rate ? If not, why not ?
CA R SEETHARAMAN
(Expert)
13 July 2021
Not possible.
Reason, A may be manufacturing unit is using material for production so material cost is selected for allocation.
B department may be providing services so labour cost is selected for allocation.
Reason, A may be manufacturing unit is using material for production so material cost is selected for allocation.
B department may be providing services so labour cost is selected for allocation.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Gst credit note by supplier
- GST on reimbursement of expenses
- Query on effect of registration of property
- Movement of goods by packers and movers - type of sale - Reg.
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Missed uploading GST Invoice
- Wrong CMPo8 file
- Gratuity paid to legal heir above 20 lakh is taxable or not
- Equity Share Sale and Purchase
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
- ITC not to be taken in accounts & GSTR-3B
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
