Overhead Costs Company Example
This week we covered Chapter 3, Process Costing and Chapter 4 Activity Based Costing. Process Costing is for manufacturers which assemble products that are identical. Activity Based Costing assigns costs to overhead activities and then assigns those costs to the assembled products. Using the company in your Week 1 post, please identify some overhead costs in the manufacturing operations. What makes these overhead costs and what cost driver should be used to apply the overhead costs to the products?
In your response to your peers try to provide an insight that they may have missed on how their chosen company might be affected by overhead costs. Alternatively, you could explain how your chosen company is similar or different from you peers in terms of overhead costs and why your cost drivers.