In Calculating Product Costs,actual Direct Materials and Actual Direct Labor

question 68

Essay

In calculating product costs,actual direct materials and actual direct labor are charged to the work in process account;however,an estimated amount of overhead is charged to the account.Why is overhead accounted for differently than the other costs of production?

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Definitions:

PLC Connection

A method of connecting Programmable Logic Controllers for automation and industrial control systems.

Geometric Average Return

The average compound return earned per year over a multi-year period.

Dividends

Payments made by a corporation to its shareholder members, representing a portion of the corporate profits.

Capital Gains Yield

The percentage change in the market price of an asset over a period, excluding dividends.