INTERNATIONAL FINANCIAL ACCOUNTING PROGRAM

FACULTY OF ECONOMICS

UNIVERSITY OF ATMA JAYA YOGYAKARTA

COVER SHEET FOR ASSIGNMENT

Student Name : Hana Resa Ananda Rahma Shella Resya Albertius Galang P Winkly Hoetanto

Student ID : 141521019 141521553 141521338 141521736

Course Title : Cost Accounting Course Code : AKT 214

Instructor : Ananstasia Susty A, DR, M.SI.,CA.,AKT. Semester : IIIAssignment Title : Summary Chapter 12

Due Date : Oct 28, 2015

Please ensure that you have met the following requirements prior submitting your assignment by ticking (√) the boxes

□ Submitted on A4 paper □ 1,5 spacing

□ 4 cm margin (left), 3 cm margin (top, bottom and right) □ Pages stapled

□ Appropriate typing, spellings, and citations □ Paginated

DECLARATIONWe declare that the assignment presented here is entirely my own work except where otherwise indicated.Date : Oct 28, 2015

Group Representative

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FACTORY OVERHEAD: Planned, Actual, and Applied

The Nature of Factory Overhead

Factory Overhead is generally defined as indirect material, indirect labor and other factory expenses which cannot be directly identified with specific jobs, products, or services.

Use of a Predetermined Overhead Rate

Because of the impossibility of tracing overhead to specific jobs or specific products, overhead cost is apportioned among jobs and units.

A predetermined overhead rate permits a consistent and logical allocation to each unit of output.

Basis used in predetermined overhead Rates

A predetermined overhead rate permits a consistent and logical allocation to each unit of output.

Factors Considered in Selecting Overhead Rate

1. Base to Be Used

a. Physical Output

b. Direct Material Cost

c. Direct Labor Cost

d. Direct Labor Hours

e. Machine Hours

f. Transactions or activities

2. Activity Level Selectiona. Theoretical Capacityb. Practical Capacityc. Expected Actual Capacityd. Normal Capacitye. Effect of Capacity on Overhead Ratesf. Idle Capacity Versus Excess Capacity

3. Including or Excluding Fixed Overhead a. Absorption Costingb. Direct Costing

4. Use of a Single Rate or Several Ratesa. Plantwide or Blanket Rate

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b. Department ratec. Subdepartmental and activity rates

5. Use of Separate Rates For Services Activities

Physical Output

Physical output or units of production is the simplest base for applying factory overhead

Estimated Factory OverheadEstimated units of prduction

=Factory Overhead per unit

Example:

If Estimated Factory overhead is $300,000 and the company intends to produce 250,000 units during the next period, then the FOH per unit is charged $1.2 ( $ 300.000 : 250.000 units).

Then an order with 1,000 completed units, is charged 1,000 x $1.2 = $1,200 of Factory Overhead

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