Fake Inc. uses a job order costing system and the following information is available from the records.the company has 3 jobs in process: 281, 282 and 83. Raw materials used 120,000.00 Direct labor hour 8.50 Overhead applied based on direct labor cost 130% Direct materials were requisitioned as follows for each job respectively: 30%, 25% and 25%, the balance of the requisitions were considered indirect. Direct labor hours per job are 2,500, 3,100, and 4,200 respectively. indirect labor is P33,000.Other actual overhed costs totaled P36,000

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.