How to calculate the indirect cost allocation rate

Indirect cost allocation rate = total manufacturing cost divided by the total wages of workers producing various products.

Indirect cost of products = wages of production workers of products * indirect cost distribution rate.

In the actual accounting work, for the allocation of construction overheads, the percentage of construction overheads actually incurred in this period is often calculated first, and then the construction overheads of various projects are adjusted according to the quota, that is, the above formula can be changed to:

The construction indirect cost to be shared in this project = [actual direct cost (or labor cost) in this project × construction indirect cost quota specified in this project ]× actual construction indirect cost in this project ÷ [actual direct cost (or labor cost) in this project × construction indirect cost quota specified in this project]

Extended data:

The simplified allocation method of indirect expenses is a simplified method for calculating the product cost in batches, and the indirect expenses incurred in each month are included in the product cost in batches. In an enterprise that organizes production according to product batches, there are many product batches every month, and the product cost is calculated by batch method, so it is very heavy to allocate indirect costs to each batch of products every month. Therefore, a simplified cost allocation method can be adopted.

The main points are as follows: the factory department summarizes the indirect expenses and actual working hours in the current month according to the product batch. If there are finished product batches at the end of the month, the cumulative indirect cost allocation rate is calculated according to the expense items to determine the indirect costs that should be allocated to the finished product batches.

Baidu Encyclopedia-Simplified Indirect Cost Allocation Method