Dear lubos, could you please explain in simple words that how we can we allocate direct labor cost and FOH on the units produced?
e.g if there are 4 employees working in factory, costing to 150,000 pkr and factory rent and electricity is amounting to 20,000 pkr and 5000 pkr per month .Assume that the production is done on demand and as per production order in batches.
In addition to this in which head should i place chart of account for labour cost and FOH??
Cost proportional to units produced are added as part of inventory creation, Labour is added as a non inventory item. Fixed costs can similarly be added by assuming normal factory utilisation and allocating costs based on percentage of resources used at that utilisation. See
Overview: Manage inventory - Part 1 Introduction
I’m less sure of the value in adding fixed costs depending only jobs running at any particular time.
Is you inventory really more expensive if you make it when the factory is quiet and there is nothing else to do?
Seems like ubaid786 would like to use Manager to run a full standard cost type accounting system. While this may well be possible, it would certainly be very cumbersome and not at all what Manager is deigned for