overhead allocation rate
[ˈoʊvərˌhɛd ˌæl.ə.ˈkeɪ.ʃən reɪt]
nounpl: overhead allocation rates
taxa de alocação de custos indiretos
1. A predetermined rate used to allocate indirect costs (overhead) to products, services, or cost centers based on a selected allocation base such as labor hours, machine hours, or direct materials cost
The company calculated an overhead allocation rate of $25 per machine hour to distribute manufacturing overhead to each product line.
A empresa calculou uma taxa de alocação de custos indiretos de R$ 25 por hora de máquina para distribuir os custos indiretos de fabricação a cada linha de produtos.
2. A ratio used in cost accounting to assign overhead expenses to cost objects in a systematic and consistent manner
By using an overhead allocation rate, the accounting department can ensure fair cost distribution across all departments.
Ao usar uma taxa de alocação de custos indiretos, o departamento de contabilidade pode garantir uma distribuição justa de custos em todos os departamentos.
This term is fundamental in both Brazilian and American accounting practices, particularly in manufacturing and service industries. In Brazil, companies increasingly adopt ABC (Activity-Based Costing) methods, though traditional overhead allocation rates remain widely used. The concept reflects the complexity of modern business cost management and is essential for accurate product pricing and profitability analysis in both markets.
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