How Do I Reduce Indirect Costs?

Simplified method of allocating overheads Using the batch method to calculate the cost of a product, a simplified method of allocating indirect costs incurred each month is included in the cost of each batch of products. In enterprises that organize production according to product batches and have more product batches each month, the batch method is used to calculate the cost of the product. Indirect costs must be allocated to each batch of products every month. The workload is very large. A simplified method of cost allocation can be used. The main points are: monthly indirect costs incurred by the factory are summarized by the factory department at the same time, and actual working hours are collected by product batch. Do not allocate overhead costs. ^[1]