Overheads

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2010 Dear All,

Anybody help me how to allocate overhead in Pharma companies?

If you know the Realtime Knowledge, pls help me.........

Pls dont try to tell me the Theory of Overheads in Costing like Stepping stone, Reciprocal & Non-Reciprocal etc.

Thanks...........

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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28 July 2010 Over heads allocation if you allocate the department department you need to allocate the basis of Direct costs basis or if the revenue department based on sale basis can be done

Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2010 Dear All,

Anybody help me how to allocate overhead in Pharma companies?

If you know the Realtime Knowledge, pls help me.........

Pls dont try to tell me the Theory of Overheads in Costing like Stepping stone, Reciprocal & Non-Reciprocal etc.

Can you give the example regarding your comment?

Thanks...........

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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30 July 2010 First you need to give the allocation you want to do to products or departments or different branches or what?

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2010 I want to allocate Overhead to Products which is different like Ampoules, Vials & PFS in Pharma.

to Calculate Conversion Cost for the different Products.

For this DPCO giving conversion cost for the scheduled drugs but so many unscheduled drugs available in the market.

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Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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01 September 2010 I have seen your query still pending.

Many years back, when I was doing the audit of one German pharma MNC, I noticed that they were distributing it based on production at selling price.
A point to be noted that overhead allocation, has somewhat, lost its relevance as the profit after allocation stands the same in whichever way you try to allocate.
If cost control is the objective it is better to analyse each overhead component based on its "driver" and then make a plan to effective control the driver itself.