The default rate calculation of indirect manufacturing costs Applied employed a linear regression model.

Abstract

The main objective of this article is to determine the best parameter to calculate the default rate which will produce the Applied manufacturing overhead costs by applying the regression analysis. To identify the best parameter to explain the indirect manufacturing costs was selected as an example the cost of indirect labor to be explained by one of three parameters such as: machine hours, lots of production and hours of labor indirect, after the statistical application was concluded that the best parameter in this article is machine hours.
Professionals who are responsible for determining the production cost of a product or service can make use of this technique to determine the cost of producing a product or service. The best parameter in the example to calculate the default rate was given by machine hours; this investigation it became clear the possibility of integrating two or more subjects and their solution put at the service of professionals working in Cost Accounting.
The authors of Cost Accounting books over the past 10 years statistics have been added to analyze the behavior of costs, however, they have not made a precise study to calculate the parameter for the default rate. The result of this document can and should be applied by a Cost Accountant to any company that performs the production of a good or service.