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What is the last step that manufacturers follow to implement a manufacturing overhead allocation system?



This question is part of Accounting 202 - Chapter 3.2
Asked by Jc, Last updated: Mar 25, 2020

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W. Pratt

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W. Pratt, Marketing Analyst, MBA, Lincoln

Answered Feb 28, 2019

The answer to this is to allocate some manufacturing overhead to each individual job. This is important because this will make sure that the process will be smooth sailing. There may be different factors that this may be based on.

For example, this may be based on the direct labor hours, the machine hours, labor costs, and all of the other potential common activities. Once the allocation is done and the jobs are assigned, then the process will go on better. Allocation is always important not only for jobs but also for the different factors related to business because this will make sure that there are different people who will work on the needed tasks.

 

John Smith

John Smith

Answered Jan 16, 2017

Allocate some manufacturing overhead to each individual job
 

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