7. Production Overhead Budget
It represents the forecast of all the production overhead
(fixed, semi-fixed, variable) to be incurred during the budget period Factors to be Considered- a) the classification of all overhead costs into fixed and variable elements.
b) The level of activity likely to be achieved during the budget period like units of output, labour hours, etc.
c) Policy of management regarding matters like overtime work , number of shifts to be worked, depreciation,
replacement of hand labour by machines ,etc.
d) Individual items of cost incurred in the past.
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