What are the most important foundations of the process to determine the rates of industrial load indirect costs in the production centers?

The following grounds:

1 - The number of product units

2 - the cost of direct materials

3 - direct wage cost

4 - initial cost of direct

5 - hours of direct action

6 - automation hours

thanx Mr Georgei

Idon't know

Divide the cost elements to:

1. elements of direct costs: includes direct materials, direct wages, industrial and expenses directly

2. elements of indirect costs: and include indirect materials, wages indirect services (expenses) industrial indirectly.

Industrial indirect costs consist of many elements change with varying degrees of change in the volume of production or activity level

Identify and include loading rates for indirect costs of industrial action following steps:

First, determine the cost centers: a production cost centers

                                       (B) the productivity of service centers

                                       (C) the costs of marketing centers

                                       (D) administrative and financial services centers

                                        E - capitalism operations centers

   Second, inventory and assessment of industrial indirect costs

You must select industrial indirect costs in advance on a discretionary basis and work on the load units of activity (units cost) its share of the estimated components.

Third: the allocation and distribution of industrial indirect costs on centers

Can distinguish between three types of indirect cost items for the purposes of the load on the cost centers, namely:

A private: It is a cost that benefit cost center and one of only items which they belonged, without other centers items therefore carry it directly, for example, the depreciation of machines in a particular center holds upside to this place, while the cost of indirect materials to the center of another bear it without other centers as well as the cost of the average time lost in another center bearing the same by the Center.

  B common items: It is a cost involved in the utilization of a range of cost centers without the other centers and distributed to the beneficiary centers as appropriate basis, for example, the dynamics expenses are distributed to centers where there are machines or equipment by the power plant and equipment (HP, or operating hours rotation, rotation or hours)

(C) General items: These are items that benefit all centers of the facility costs, without exception, and is distributed to the beneficiary centers as appropriate basis for the nature of each element, for example, rent the building is considered a general clause and distributed to all centers on the basis of the area occupied by each center.

Loading on the basis of the number of units of production rate:

Indirect costs of industrial discretionary private place ÷ number of units produced Center =

Upload rate based on a percentage of the cost of direct materials:

Indirect costs of industrial discretionary private place ÷ estimated cost of direct materials ×100 =

And other rates.

The essential consideration in selecting a base is that it be the one best suited for assigning the pool of costs to cost objectives in accordance with benefits derived; with a traceable cause-and-effect relationship; or with logic and reason, where neither benefit nor a cause-and-effect relationship is determinable.

1. When a cost grouping can be identified directly with the cost objective benefited, it should be assigned to that cost objective.
2. If expenses in a cost grouping are more general in nature, they can be assigned based on a cost analysis study if this results in an equitable distribution of the costs.
3. If the expenses in a cost grouping are more general in nature, the distribution may be based on a cost analysis study which results in an equitable distribution of costs. Such cost analysis studies may be take into consideration weighting factors, population, or space occupied if appropriate. Cost analysis studies, however, must:
   • Be appropriately documented in sufficient detail for subsequent review by the cognizant agency for indirect costs,
   • Distribute the costs to the related cost objectives in accordance with the relative benefits derived
   • Be statistically sound
   • Be performed specifically at the institution at which the results are to be used
   • Be reviewed periodically, but not less frequently than rate negotiations, updated if necessary, and used consistently.

Agree with expert answers.

AGREE WITH ALL ANSWERS 

Agree with Mr Georgie Answer

I agree with everyone answer