factory overhead
[ˈfæk.tər.i ˈoʊ.vər.hed]
nounpl: factory overheads
despesas gerais de fabricação
1. The indirect costs associated with manufacturing that cannot be directly attributed to specific products, including utilities, maintenance, depreciation, and supervisory salaries
The company allocated factory overhead costs across all product lines based on machine hours.
A empresa alocou custos de despesas gerais de fabricação em todas as linhas de produtos com base nas horas de máquina.
2. Manufacturing costs that are not direct materials or direct labor but are necessary for production operations
Factory overhead increased by 15% due to rising utility costs.
As despesas gerais de fabricação aumentaram 15% devido ao aumento dos custos de energia.
Factory overhead is a critical accounting concept in both Brazilian and American manufacturing industries. In Brazil, this term is essential for companies adhering to IFRS (International Financial Reporting Standards) and Brazilian accounting standards. American companies use this terminology extensively in cost accounting and are governed by GAAP standards. The calculation and allocation of factory overhead significantly impacts product costing, inventory valuation, and financial reporting in both countries.
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