Assessing the amount of overhead cost that can be allocated to each production process can be tough. This is why an overhead rate is calculated to estimate the overhead costs for each cost driver or activity. Overhead costs can be allocated to the direct costs such as direct labor costs … Read more
Before companies launch a new product or service, they often need to find the predetermined overhead rate for that particular good or service. Finding the predetermined overhead rate is necessary in order to keep expenses in tandem with both production levels and expected sales. This ensures that businesses price their … Read more
In accounting, carrying out a bank reconciliation at the end of a financial period is very important to ensure that the financial records of a company are correct. Making the necessary bank reconciliation journal entries helps to eliminate any discrepancies between the bank statement figures and the figures on the … Read more
Process costing system is an accounting method usually used by manufacturing companies that mass produces very identical products or units of output. This costing system is used when the costs of producing each individual unit are very similar, and it is difficult to track the costs for each individual unit … Read more
Process costing is a type of cost accounting method that is used to determine the cost of a product at each production stage or process. Hence, knowing when to use process costing for manufactured goods allows manufacturing companies to evaluate the amount of product that is being produced and how … Read more
A bank service charge journal entry is part of a bank reconciliation process. Businesses usually discover that at the end of an accounting period, the ending cash balance in their books and the ending balance in the bank do not always match. As a result, bank reconciliations are constructed to … Read more
There are financial metrics that allow investors to assess a company’s ability to provide its investors with an acceptable return on their investment. Measuring a company’s tangible book value by deducting the company’s liabilities from its tangible assets gives investors a better understanding of how much money will be left … Read more
The predetermined overhead rate formula can be used to balance expenses with production costs and sales. For businesses in manufacturing, establishing and monitoring an overhead rate can help keep expenses proportional to production volumes and sales. It can help manufacturers know when to review their spending more closely, in order … Read more
Individuals and businesses are often on the lookout for tax incentives that aid in reducing their tax liabilities. One such provision is made by the Section 168 deduction, this is a section of the U.S Internal Revenue Code that provides rules for the depreciation of property used in a trade … Read more
Does bonus depreciation have a limit? Bonus depreciation was enacted by Congress’ Job Creation and Worker Assistance Act of 2002 but, in 2017, the Tax Cuts and Jobs Act (TCJA) was passed and notable changes were made to this tax incentive. According to the rules, there are bonus depreciation limits … Read more
