How is fixed overhead applied to products? Why is it important?© BrainMass Inc. brainmass.com June 3, 2020, 11:44 pm ad1c9bdddf
How is fixed overhead applied to products? Why is it important?
Following are the steps for applying fixed overhead to products:
1. Select the cost driver, i.e. machine hours or direct labor hours.
2. Prepare the fixed overhead budget for the forthcoming period.
3. Compute the factory overhead application rate: Total budgeted factory overhead/total budgeted ...
Fixed overhead applied to products and why is it important is determined.