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Topic 3: Accounting for Direct material, Direct labor and Overhead Costs -…

- - - - Misuse or misappropriation
    - - Maintaining appropriate level of inventory
      - minimum level of inventory
      - reorder point
      - Economic order quantity
    - - Purchase and issuance of materials
      - Compare recorded inventories and physical count
- - - - Computation of the gross pay for each employee
      - income tax, socso, epf
    - - Allocation of labour cost to jobs, overhead accounts
- - - - Cost Allocation:
        process of assigning costs to cost objects that involve the use of surrogate rather than direct measures
- - - - Assigning all manufacturing overheads to production and service cost centres
      - Reallocating the costs assigned to service cost centres to production cost centres.
      - Computing separate overhead rates for each production cost centre.
      - Assigning cost centre overheads to products or other chosen cost objects.