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How to do fixed cost allocation on across inventory category in Periodic Average Cost — Cloud Customer Connect
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How to do fixed cost allocation on across inventory category in Periodic Average Cost

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edited Jul 8, 2023 8:25AM in Costing 8 comments

Summary:

In Periodic Average Costing method, How to allocate fixed cost allocation (For ex. $ 10000 of Rent, $5000 of water bill ) on an Invenory Category i.e. all Finished goods associated with Invetory category manufactured within a month. This is required for Process manufacturing.

Can it be handled through Overhead Rules for Periodic average cost ? If yes How to handle it because there are only 4 values in Cost basis which are not applicable. in this case.

If No, what would be the possible way to handle it.


In Periodic Average Costing method, How the system will spread the Item category level fixed costs from the trial balance (salaries, contracted services, non-cash costs, overheads etc) on all the batches/work orders within a month. What are the system options to spread these costs across the Item category?

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