Accounting for overhead

　　1. Production overheads= Indirect material+ Indirect labor+ Indirect expenses

　　2. Non-production overheads= Administration cost + Selling and Distribution cost

　　3.Absorption costing 吸收成本法，思路：以总数出现的overheads需要被吸收到每个产品中，这里需要找到一个很公平的分摊基础。

　　4. Production overheads arise from cost incurred from production department (eg. work clothes of production labors), cost incurred from service department and general costs (eg. Heating and lighting, factory rent)

　　5. Absorption process:

　　a. Allocation of overhead cost expenditures by separating between production department, service department and general overheads;

　　b. Apportionment of general overheads to production department and service department;

　　c. Re-apportionment. Apportionment service department costs to production department costs;

　　d. Use absorption method to absorb the overheads into each product (eg. number of units, direct labor hour, machine hour, percentage of direct labor costs and percentage of prime cost and so forth).

　　6. Overhead absorbed(入账值,未必是倒计时的实际结果)= Absorption rate based on the budget* Actual activity

　　7. Over/under absorbed: 如果入账(Overhead absorbed)的值小于实际值(Overhead incurred/ actual overhead)，称为under absorbed，反之是over absorbed.

　　8. 如果overhead absorbed 大于 actual overhead,说明成本多记录了，那么利润就会增加。

如果overhead absorbed 小于 actual overhead,说明成本被低估了，那么利润就会减少。

　　9. 吸收成本法（absorption costing）主要是吸收固定的间接费用（Fixed production overhead），吸收时应该用的是生产量而非销售量；而边际成本法又称可变成本法，其中固定间接费用不需要吸收到每一个产品的成本中，而是以总数的方式被减掉。

 

　　10. Profit statement under absorption costing

 

 

                                                                        

　　11. Profit statement under marginal costing

 

                                                                                                                

　　注意：可变营销或者运输费用并不纳入存货的成本中。

　　12. 当存货水平上升的时候，在吸收成本法中，说明一部分的期末存货吸收了固定制造费用，计入了期末存货的成本中。但是在边际成本法下，这个固定制造费用都被扣除，所以说 profit under absorption costing more than profit under marginal costing. 如果存货水平下降的时候，在吸收成本法下，产品的成本中除了吸收本期的固定制造费用外，还要吸收一部分上期的固定制造费用。所以利润会降低。如果期初存货等于期末存货，两种方法下的利润相等。