: inflammation of several muscles at once; specifically : an inflammatory muscle disease of unknown cause that affects muscles and chiefly skeletal muscles and is characterized especially by weakness of the muscles (such as those of the shoulder, neck, or hip) closest to the trunk â see dermatomyositis.
Direct Costs and Indirect Costs. Manufacturing costs may be classified as direct costs and indirect costs on the basis of whether they can be attributed to the production of specific goods, services, departments or not. Direct costs can be defined as costs which can be accurately traced to a cost object with little effort. Cost object may be a product, a department, a project, etc. Direct costs typically benefit a single cost object therefore the classification of any cost either as direct or indirect is done by taking the cost object into perspective. A particular cost may be direct cost for one cost object but indirect cost for another cost object.
Predetermined overhead rate is estimated overhead divided by estimated activity. The example states that estimated activity is 200,000 direct labor hours. $1,250,000 / 200,000 direct labor hours = $6.25 per direct labor hour (donât forget to label your numbers) Applying the predetermined overhead rate to jobs. Alright, so we have a rate. Now what? We must apply the rate to our jobs. The rate from our example above is $6.25 per direct labor hour. How do we apply this to our jobs? Based on the direct labor hours worked on the job. For each direct labor hour worked, we will add $6.25 of overhead to the job. Applied overhead is overhead added to a job by taking the predetermined overhead rate multiplied by the actual activity. Applied overhead is added to direct materials and direct labor to calculate total job cost. Total Job Cost = Direct Materials + Direct Labor + Applied Overhead. Every time a job is completed, overhead is applied to the job. The total cost of all the jobs completed over the course of the year is cost of goods sold. Example #2