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,

Semester

M.SI.,CA.,AKT.

: III

Assignment 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
4 cm margin (left), 3 cm margin (top, bottom and right)
Appropriate typing, spellings, and citations

1,5 spacing
Pages stapled
Paginated

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

Group Representative
FACTORY OVERHEAD: Planned, Actual, and Applied

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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 Selection
a. Theoretical Capacity
b. Practical Capacity
c. Expected Actual Capacity
d. Normal Capacity
e. Effect of Capacity on Overhead Rates
f. Idle Capacity Versus Excess Capacity
3. Including or Excluding Fixed Overhead
a. Absorption Costing
b. Direct Costing
4. Use of a Single Rate or Several Rates
a. Plantwide or Blanket Rate
b. Department rate
c. Subdepartmental and activity rates
5. Use of Separate Rates For Services Activities

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

Estimated Factory Overhead

=Factory Overhead per unit
Estimated units of prduction
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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