Fixed manufacturing overheadd is cost that not be changed due to change in the activity. it is fixed upto certain level. Let example building/actory rent is fixed this will not change due to change in the production or change in the acitivity it will only change when addition space require of building or factory.
Formula for calculate fixed manufacturing overhead is - At the start of the year there is predetermined fixed over head rate is prepared by the accounts team and it is on the basis of direct labor hour or machine hours. So actual cost will be taken actual direct labor hour or actual machine hours multiply by predetermined fixed manufacturing overhead rate.
A business prime cost is - Direct Material , Direct labor & Direct expenses. But supervisor salary , Factory rent , factory office expenses , Insurance & Utilities are fixed manufacuring overhead.
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