Accounting question
- Thread starter rsam93
- Start date
Try this...
Since they are allocating based on direct labor costs, try to just take the % of direct labor for each year.
So last year had $6,500 of direct labor and they were allocated $5,135 of overhead. So, for every $1.00 of direct labor, they are allocated $0.79 of overhead, or 79% of your labor costs.
In the current year, they've incurred $12,600 of direct labor and have been allocated $10,332 of overhead. In this year, for every $1.00 of direct labor, they are being allocated $0.82 of overhead, or 82% of your labor costs.
Hope this explanation helped
Since they are allocating based on direct labor costs, try to just take the % of direct labor for each year.
So last year had $6,500 of direct labor and they were allocated $5,135 of overhead. So, for every $1.00 of direct labor, they are allocated $0.79 of overhead, or 79% of your labor costs.
In the current year, they've incurred $12,600 of direct labor and have been allocated $10,332 of overhead. In this year, for every $1.00 of direct labor, they are being allocated $0.82 of overhead, or 82% of your labor costs.
Hope this explanation helped