Suppose there is manufacturing unit taking orders and manufacturing various products, Now how will the overheads will be allocated to the products.
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All expenses incured for the production of perticular unit are known then these expenses are allocated to that production unit otherwise allocated to general overheads. If expenses incured which are not concerned with the production unit directly or indirectly should not be allocated to that production unit.
Selling and distribution expenses also consider while setting the selling price.
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