The normal overhead costs are determined in the operating accounting sheet in order to match them with the actually incurred Overhead to compare and to be able to determine whether too many costs were incurred as underfunding or too few costs as overfunding. This will make the Cost center accounting or the operating accounting sheet created therein does justice to the given control function.
Calculation of normal overheads
The normal overhead costs are calculated by multiplying the actual direct costs with the associated normal overhead surcharges, which are based on past experience.
In practice the normal manufacturing costs of sales are generally used as the reference value, but sometimes also the normal manufacturing costs of generation to determine the normal administrative overheads and normal sales overheads