Under Generally Accepted Accounting Principles, or GAAP, manufacturing overhead must be allocated to each item produced. Manufacturing overhead is the expenses associated with the manufacture of ...

Manufacturing overhead is applied to products on the basis of a predetermined overhead rate. This rate is calculated as the total estimated overhead for the period divided by the estimated activity ...

Every business leader should probably have at least a rudimentary understanding of accounting. It’s not about becoming an accountant; it’s just about knowing enough not to get fooled or fool yourself.

As a former corporate controller and senior vice president of operations, I have experienced both sides of allocated overhead. I have learned manufacturing executives have more control over costs ...