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Departmental Overhead Rate Method
The departmental overhead rate method is a way of allocating indirect costs to products or services based on the overhead rates of specific departments within an organization, rather than using a single company-wide rate.
Overhead
The total cost of running a business that cannot be directly attributed to the production of goods or services, similar to factory overhead but can apply to non-manufacturing costs.
Overhead Allocation Base
A measure or activity, such as direct labor hours or machine hours, used to assign overhead costs to products or services.
Direct Labor Hours
The total hours worked directly on a product or service by employees in the production process.
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