How to allocate indirect crediting costs under the general batch method

The batch method is a method of recognizing production costs and calculating product costs according to product lots. In small-lot, single-piece production enterprises, the enterprise's production activities are basically based on the orders of the ordering unit to issue job number to organize production, product costing by product lot, often consistent with the calculation of product cost by order, and thus the batch method is also called the order method.

Classification

The batch method is divided into the general batch method and the simplified batch method because of the different methods of allocating overhead credits used.

1. General batch method

The batch method that uses the current month's allocation rate to allocate indirect overhead is known as the general batch method (batch method), that is, the batch method that has batch calculation of the cost of products in process.

2. Simplified batch method

The batch method that uses a cumulative allocation rate to allocate indirect overhead is called the simplified batch method, also known as the batch method that does not calculate the cost of products in process in batches, and is a simplified form of the general batch method.

Simplified batch method

Monthly indirect costs incurred, the first in the basic production cost of the secondary accounts, according to the cost of items accumulated, only in the month of completion of products, only on the finished product, according to the proportion of the cumulative hours of work allocated to the indirect costs of the completed product cost; and all of the product should be borne by the indirect costs of the completed product, is reflected in the total! In the basic cost secondary account, no allocation is made and no batch calculation is made. Common batch method.