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May 13, 2016 at 05:35 AM

Overhead allocation based on Revenue (Assessment Cycle)



Currently we are doing overhead allocation in proportion of Material and Labor. Accordingly the same has been maintained as SKF. Now operations want to change the allocation method based on the Revenue.

Is it correct way to allocated resources in the ratio of Revenue ? What would be the implication if we change the method ? and what are the changes required to maintain SKF based on Revenue?