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Overhead Costing - Food Manufacturing
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Activity Based Costing
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Sara Wietecha
16
Sara Wietecha, United States

Overhead Costing - Food Manufacturing

The company I work for manufactures food. The company is small. How much overhead should I count into my costing?
I do not want to put too much in so I don't overcharge the customers when I price them.

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  Joseph Rivera
0
Joseph Rivera
Manager, Philippines
 

Overhead on Costing - Food Manufacturing

Overhead allocation is an ABC strength but it is not for everyone. If you have multiple products and a significant overhead then do consider ABC. You can look up activity-based pricing that can fairly allocate overhead and reduce over-charging for some of your customers.

  ANDRES PENAGOS
0
ANDRES PENAGOS
Financial Consultant, Colombia
 

Overhead Allocation in Costing. ABC

I have had experience in manufacturing companies, and distributing overheads has to be carefully analyzed in order to be just fair with all products (and services). Obviously overhead is part of the formula to calculate your prices, because all money that has been spent has to return when you sell all your products.
Consider this: it is not fair to send more overhead to products of a specific process when you increase productivity. If you produce more why to punish that productivity?

 

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Special Interest Group


More on Activity Based Costing
Summary Discussion Topics
topic Limitations and Advantages of ABC for Budgeting
topic Limitations ABC monitoring operations
topic ABC in an Advertising Firm?
topic The Cost of Non-value-added Activities
topic ABC: reduce non value adding activities?
topic Consequences of ABC Analysis
topic Capacity Minutes and Industry Norms
topic Drivers still Right?
topic ABC Helps Companies Survive Recession
topic Traditional Costing versus Activity Based Costing
topic The Process of Activity Based Costing (ABC) simplified
topic Activity Based Costing (ABC)
topic Conditional Resources in ABC
topic ABC in service companies such as airlines?
👀Overhead Costing - Food Manufacturing
topic Degree of Detail in ABC
topic Activity Based Costing Implementation
topic ABC and Decision making
topic Time-driven ABC (TDABC)
topic Activity Based Management (ABM)
topic Calculating the Most Profitable Way of Manufacturing a Product
topic ABC or TOC? The Differences between Activity Based Costing and the Theory of Constraints
topic Recommended ABC Software
topic Comparison Activity Based Costing, Time-Driven-ABC and Lean Accounting
topic ABC Costing in Make to Order of Repetive Manufacturing
topic Organizational Issues when Introducing ABC
topic Over Recovery / Under Recovery Level
🔥 What is Process Costing?
topic ABC in the Federal Environment
topic An ABC Initiative is Only as Effective as the Software That Supports It
topic What is Job Order Costing?
topic How to Derive Overhead Cost from a P&L?
Special Interest Group
Knowledge Center

Activity Based Costing


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