The Adam manufacturing company produces a single product which goes through one process only. The manufacturing cycle takes a month. The company started its manufacturing operation on 1st February 2021 and costs of production for this month were as follows:   Material Rs. 41,412;      Labor    Rs. 32,054;         FOH        Rs. 23,870   The production statistics for the month were as follows:   Units completed and transferred to finished goods store were 6,500, while no loss was observed during the process.   Units in Process on February 28, 2021 were 1,600 (Material 40%, Labor and FOH 20 per cent)   Requirement: Prepare the Cost of Production Report at the end of February 2019

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.