Can someone please explain the meaning of Supplementary Overhead rate and how do we apply it in solving problems of cost sheet in costing ?
Regards,
Sumanta.
Sumanta Das Gupta (Accountant) (310 Points)
14 August 2011Can someone please explain the meaning of Supplementary Overhead rate and how do we apply it in solving problems of cost sheet in costing ?
Regards,
Sumanta.
i knw overhead rate but i don knw wats supllementary...
Costing has 2 approaches either Absorption costing or marginal costing..
Absorption costing is used to find the cost of a product ,latter is for decision making.
over head rate =total over head/total machine hrs
Overhead rate p.u.-simply multiply by hrs reqd pr unit.
mounika
(semi qualified chartered accountant)
(981 Points)
Replied 14 August 2011
I THINK SUPPLIMENTARY RATE IS USED WHEN ACTUAL AMOUNT OF UNDER/ OVER ABSORPTION IS GIVEN IN D PROBLEM. SRY IF I AM WRONG
Sumanta Das Gupta
(Accountant)
(310 Points)
Replied 15 August 2011
Thank you for your replies. According to costing books, if the difference between over/underabsorption is significant, supplementary rate is used. But the question is, how do we calculate this rate and apply to the problems of costing ?
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