Method of allocating manufacturing cost to production cost

The method of allocating manufacturing expenses to production costs is as follows:

The methods of transferring manufacturing cost to production cost include direct material and direct labor, indirect material and indirect labor, manufacturing cost allocation rate, process cost system, product cost drive, actual cost system and standard cost system.

1. Direct materials and direct labor: In this year's production cost, direct materials and direct labor are direct and specific manufacturing expenses, which can be directly included in the production cost.

2. Indirect materials and indirect labor: As a part of manufacturing expenses, indirect materials and indirect labor cannot be directly traced back to a specific product, and need to be allocated to the production costs of different products through manufacturing indirect expenses allocation.

3. Distribution rate of manufacturing expenses: The distribution rate of manufacturing expenses refers to the calculation and distribution of manufacturing expenses by choosing a cost distribution method according to certain indicators. The commonly used indicators of manufacturing cost allocation rate include direct labor cost, direct material cost and direct working hours.

4. Process cost system: The process cost system refers to dividing the production process into several production links, accumulating the manufacturing expenses generated in each production link, and then allocating them to all products produced in that link.

5. Product cost driving: This method takes one or more products as "driving factors" and allocates the manufacturing cost to each product, which is mostly used for customized products and non-scale production scenarios.

6. Actual cost system: This method is based on the actual manufacturing cost, and determines the manufacturing cost of products by calculating and apportioning the manufacturing cost. The actual cost system is a relatively simple method to allocate manufacturing expenses, which is suitable for small-scale production and conventional production.

7. Standard cost system: The standard cost system is a cost system based on theory. By formulating reasonable cost standards, multi-dimensional analysis of manufacturing costs, manufacturing costs will be allocated to various products.

Explanation of manufacturing cost

Manufacturing cost refers to various costs incurred in manufacturing a product or providing a service, including direct labor cost, direct material cost and manufacturing overhead cost. Manufacturing cost is one of the key indicators that manufacturing enterprise managers pay attention to. Direct labor cost refers to the labor cost directly used for manufacturing products, that is, the direct labor cost directly related to manufacturing products, such as workers' wages and benefits.

Direct material cost refers to the cost of raw materials for manufacturing products, that is, the direct material cost directly related to manufacturing products, such as wood, stone, glass, steel and so on.

Indirect manufacturing cost refers to the expenses indirectly related to the product manufacturing process except direct labor cost and direct material cost, such as industrial water, electricity and depreciation expense. Manufacturing expenses are usually allocated to each product at a certain allocation rate.