The two most common allocation bases for factory overhead are direct labor hours and machine hours, although direct labor dollars (mount spent on labor) can also be used as a variation of direct labor hours. When you are allocating overhead costs, you want to distribute overhead costs between the production processes, they should be allocated based on the amount of resources spent on the production of each unit or badge of units.
If you applied overhead costs based on total units produced, what would happen if a factory produced more than one type of finished product? And if one of those products required many more processes than the rest, should they all cost the same? E.g. a Toyota factory producing Yaris cars (small compacts) and Land Cruisers (very large SUVs) cannot allocate the same overheard costs to both a Yaris car and a Land Cruiser since 3 Yaris cars fit inside a Land Cruiser. It obviously costs more to produce a Land Cruiser, that is why you shouldn't allocate overhead costs based on total production units.
The following five bases are generally used in calculating the application rate of manufacturing overhead:
1. Production units
2. Direct material cost
3. Direct labor cost
4. Hours of direct labor
5. Machine hours
When he mentions the Production Units, he refers to the product or merchandise produced by the company, that is, what is intended for sale, in which this method is used is very simple, since the information on the units produced is readily available. to apply indirect manufacturing costs. It is based on the unit of finished product.
I would reccomend her, but I would tell the other company to be careful. She may not have been proven guilty, but it doesn not mean that she did not do it. Now, it is all up to the company to make the choice.
Sandra as a production manager is responsible to make a list of material received from the supplier. For an accurate list, it is important that the supplier must provide her with the detail of every inventory they provided along with the recipes. In the previews month, the supplier provided an erroneous list which leaked detail and in this case, her report cannot be considered authenticate or reliable because it lacked accuracy.
Option D. Building new core competencies to create and compete in markets of the future.
Explanation:
The market entrants when enter they don't have any share of market. To attain the market they bring with them uniqueness in their product which the rival companies cann't offer. For this reason, many existing companies try to add additional capabilities and competencies in its existing strengths. This uniqueness achieved gives a competitive advantage which means the correct option is option D.
