HOW TO DETERMINE OVERHEAD RATES Overhead expenses are those production and nonproduction costs not readily traceable to specific jobs or processes. Overhead expenses encompass three general areas: indirect materials, indirect labor, and all other miscellaneous production expenses, such as taxes, insurance, depreciation, supplies, utilities, and repairs. Therefore, overhead expense is […]
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HOW A COMPANY CAN TURN A COST CENTER INTO A PROFIT CENTER A profit center is a small unit of a company that generates revenue in excess of its expenses. It is expected that, through the sales of goods or services, the unit will turn a profit. This is in […]
WHEN EVALUATING COST/BENEFIT ANALYSIS Cost/benefit analysis is the exercise of evaluating an action’s consequences by weighing the pluses, or benefits, against the minuses, or costs. It is the fundamental assessment behind virtually every business decision, due to the simple fact that business managers do not want to spend money unless […]