I spent 11 years in public accounting and now have taken a position within a startup manufacturing company. I must brush up on my cost accounting.
So, we have three product lines. And product line 3 uses a product from product line 1 in its assembly. The bosses (they are not accountants) want to charge overhead to line 3 since we are using a line 1 product.
We have not done anything with overhead at this point, so I am not sure how to go about doing this. At this point, we do not have an overhead account and we just add $80 to our cost (plus a markup) to our sales price. But I can't really do that in this situation since we are "selling" it to ourselves.
Any advice!?
So, we have three product lines. And product line 3 uses a product from product line 1 in its assembly. The bosses (they are not accountants) want to charge overhead to line 3 since we are using a line 1 product.
We have not done anything with overhead at this point, so I am not sure how to go about doing this. At this point, we do not have an overhead account and we just add $80 to our cost (plus a markup) to our sales price. But I can't really do that in this situation since we are "selling" it to ourselves.
Any advice!?