{"id":999971507,"date":"2025-03-28T17:41:30","date_gmt":"2025-03-28T10:41:30","guid":{"rendered":"https:\/\/bizzi.vn\/?p=999971507"},"modified":"2026-06-07T17:10:28","modified_gmt":"2026-06-07T10:10:28","slug":"what-is-general-manufacturing-cost","status":"publish","type":"post","link":"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/","title":{"rendered":"What is general production cost? How to account for account 627 according to Circular 200"},"content":{"rendered":"<p class=\"\" data-start=\"169\" data-end=\"377\"><em><strong data-start=\"169\" data-end=\"242\">General manufacturing costs <\/strong>accounts for a large proportion of total production costs, so controlling these costs well will help businesses reduce product costs, thereby increasing profits and competitiveness.<\/em><\/p>\n<p class=\"\" data-start=\"379\" data-end=\"590\"><em>This article by Bizzi will help you better understand what general manufacturing costs are, their classification, role and how to account for account 627 most accurately.<\/em><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Index<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewbox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewbox=\"0 0 24 24\" version=\"1.2\" baseprofile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Khai_niem_chi_phi_san_xuat_chung_la_gi\" >What is the concept of manufacturing overhead?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Phan_loai_chi_phi_san_xuat_chung\" >Classification of general manufacturing costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Cac_khoan_muc_chi_phi_san_xuat_chung_gom_nhung_gi\" >What are the general manufacturing cost items?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Tai_khoan_ke_toan_su_dung\" >Accounting accounts used<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Cach_hach_toan_tai_khoan_627_%E2%80%93_chi_phi_san_xuat_chung\" >How to account for account 627 - general production costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Cac_phuong_phap_phan_bo_chi_phi_san_xuat_chung\" >Methods of allocating manufacturing overhead costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Cach_cat_giam_va_toi_uu_chi_phi_san_xuat_chung\" >How to cut and optimize overall production costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Chi_phi_san_xuat_chung_la_gi_trong_ke_toan_quan_tri\" >What is manufacturing overhead in management accounting?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/bizzi.vn\/en\/what-is-general-manufacturing-cost\/#Lien_he_voi_Bizzi_kiem_soat_chi_phi_san_xuat_hieu_qua\" >Contact Bizzi for effective production cost control<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Khai_niem_chi_phi_san_xuat_chung_la_gi\"><\/span><b>What is the concept of manufacturing overhead?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<blockquote><p><span style=\"font-weight: 400;\">Definition of manufacturing overhead by <strong>Circular 200\/2014\/TT-BTC<\/strong> is c<\/span><span style=\"font-weight: 400;\">General production and business costs incurred in workshops, departments, teams, and construction sites. <\/span>Not including direct material costs, direct labor costs, and construction machinery costs. <strong>General manufacturing costs are difficult to determine directly for each product.<\/strong> \u2192 must be allocated indirectly, that is why accountants must calculate carefully and reasonably to avoid cost deviation.<\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">\u2013 The role of general production costs:<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Important factors <strong>product cost structure<\/strong>, goods, services<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Important basis for determining cost of goods sold and business profit<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Help businesses make effective business decisions.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u2013 Scope of application:<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Only used in industrial production, agriculture, forestry, fishery, basic construction, transportation, post, tourism, and service enterprises.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Not for commercial use.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u2013 Distinguish between general production costs, business management costs and sales costs:<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Production costs directly participate in the production process to create goods and services, are included in the price of goods in stock, and when sold, will be converted into cost of goods.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Administrative and selling expenses are not directly involved in the production process.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The scope of production cost incurred only includes costs <strong>arising in workshops and factories.<\/strong><\/span><\/li>\n<li><span style=\"font-weight: 400;\">The scope of arising of business management costs and sales costs is the entire business or sales department, business management department.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">For example: Office rental costs for the production team are production costs, while office rental costs for the accounting team, human resources, board of directors, etc. are <strong><a href=\"https:\/\/bizzi.vn\/chi-phi-quan-ly-doanh-nghiep-la-gi\/\">business management costs<\/a><\/strong>.<\/span><\/p>\n<figure id=\"attachment_999971519\" aria-describedby=\"caption-attachment-999971519\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-999971519\" title=\"Understand what general production costs are to help businesses increase profits and competitiveness.\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Khai-niem-chi-phi-san-xuat-chung-la-giiiii.jpg\" alt=\"Understand what general production costs are to help businesses increase profits and competitiveness.\" width=\"1200\" height=\"675\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Khai-niem-chi-phi-san-xuat-chung-la-giiiii.jpg 1024w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Khai-niem-chi-phi-san-xuat-chung-la-giiiii-300x169.jpg 300w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Khai-niem-chi-phi-san-xuat-chung-la-giiiii-768x432.jpg 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Khai-niem-chi-phi-san-xuat-chung-la-giiiii-18x10.jpg 18w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-999971519\" class=\"wp-caption-text\">Understand what general production costs are to help businesses increase profits and competitiveness.<\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"Phan_loai_chi_phi_san_xuat_chung\"><\/span><b>Classification of general manufacturing costs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">\u2013 Fixed general production costs: <\/span><\/p>\n<blockquote><p><strong>Fixed manufacturing overhead<\/strong> are indirect costs that do not change with the number of products produced, including: machinery depreciation, factory management salaries, factory rental costs, etc. This cost <strong>affected by mechanical wear and tear over time<\/strong>.<\/p><\/blockquote>\n<ul>\n<li><span style=\"font-weight: 400;\">For example: <strong>Fixed asset depreciation costs<\/strong>, maintenance costs <strong>machinery and equipment<\/strong>, factory, administrative management costs in workshops, departments, teams, production teams.<\/span><\/li>\n<li><b>Allocation method<\/b><span style=\"font-weight: 400;\">: Based on normal capacity of production machinery.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If actual product &gt; normal capacity: Allocate according to actual costs incurred.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If actual product &lt; normal capacity: Allocate according to normal capacity, unallocated portion is recorded in cost of goods sold in the period.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u2013 Variable general manufacturing costs:<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Are indirect costs that vary directly or almost directly with the quantity of products produced.<\/span><\/p><\/blockquote>\n<ul>\n<li><span style=\"font-weight: 400;\">For example: Raw material costs, indirect materials, indirect labor costs.<\/span><\/li>\n<li><b>Allocation method<\/b><span style=\"font-weight: 400;\">: Allocate all processing costs for each product unit according to actual costs incurred.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cac_khoan_muc_chi_phi_san_xuat_chung_gom_nhung_gi\"><\/span><b>What are the general manufacturing cost items?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">\u2013 Factory staff costs:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Salary, allowances, and mid-shift meal allowances for workshop and production department managers.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Salary deductions (social insurance, health insurance, union contributions, unemployment insurance).<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u2013 Material costs:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Materials used to repair and maintain fixed assets, tools and equipment under the management and use of the workshop.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Temporary shelter costs.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u2013 Cost of production tools:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Cost of tools and equipment used for management activities of workshops, departments, teams, and production groups.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fixed asset depreciation costs: <\/span><span style=\"font-weight: 400;\">Depreciation of fixed assets used directly for product manufacturing and service provision; <\/span><span style=\"font-weight: 400;\">Fixed assets used for the operation of workshops, departments, teams, and production groups.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u2013 Outsourcing service costs (<strong>Regarding outsourcing service costs<\/strong>)<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Repair costs, outsourcing costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Electricity, water, telephone, internet costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Fixed asset rental, costs paid to subcontractors (for construction and installation enterprises).<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u2013 Other cash expenses:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Reception and notary fees.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Cash costs other than the above-mentioned costs serve the operations of the workshop, department, team, and production group.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Tai_khoan_ke_toan_su_dung\"><\/span><b>Accounting accounts used<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><b>\u2013 Account 627<\/b><span style=\"font-weight: 400;\"> \u2013 General production costs:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">This account <\/span><b>no ending balance<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Detailed accounting for each workshop, department, team, and production group.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Must be accounted for in detail according to 2 types: Fixed general production costs and variable general production costs.<\/span><\/li>\n<\/ul>\n<p><b>\u2013 Level 2 accounts of account 627<\/b><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">6271 \u2013 Factory staff costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">6272 \u2013 Material costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">6273 \u2013 Cost of production tools.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">6274 \u2013 Fixed asset depreciation expenses.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">6277 \u2013 Outsourced service costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">6278 \u2013 Other cash expenses.<\/span><\/li>\n<\/ul>\n<p><b>\u2013 Formula for calculating general production costs<\/b><span style=\"font-weight: 400;\">:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Production cost = Factory staff cost + Material cost + Production equipment cost + Fixed asset depreciation cost + Outsourced service cost + Other cash costs.<\/span><\/p>\n<p><b>Important Note:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">CPSXC can be allocated to each product and order according to appropriate criteria (labor hours, machine hours, output...).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In commercial enterprise, account <\/span><b>627<\/b><span style=\"font-weight: 400;\"> less used, instead <\/span><b>641 \u2013 Selling expenses<\/b><span style=\"font-weight: 400;\"> and <\/span><b>642 \u2013 Business management costs<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cach_hach_toan_tai_khoan_627_%E2%80%93_chi_phi_san_xuat_chung\"><\/span><b>How to account for account 627 - general production costs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>\u2013 Employee cost accounting:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 6271\/Credit account 334 (salary, wages, allowances).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 6271\/Credit account 338 (salary deductions).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Material cost accounting:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 6272\/Credit account 152 (export of shared materials).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 6273\/Credit account 153 (export of small value tools and equipment).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 242\/Credit account 153 (export of high value tools and equipment).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 6273\/Credit account 242 (allocation of tool and equipment value).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for depreciation costs:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 6274\/Credit account 214 (fixed asset depreciation).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for outsourced service costs:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 6278, Debit account 133\/Credit account 111, 112, 331 (electricity, water, telephone costs,...).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for prepaid expenses:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 2413, Debit account 133\/Credit account 331, 111, 112 (actually incurred major repair costs of fixed assets).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 242, 352\/Credit account 2413 (cost of major repair of completed fixed assets).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 6273\/Credit account 352, 242 (pre-deduct or gradually allocate major repair costs of fixed assets).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for leased fixed assets costs:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 627, Debit account 133\/Credit account 111, 112, 331 (initial direct costs related to operating lease).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 627\/Credit account 214 (depreciation of fixed assets for operating lease).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for incurred costs payable for construction warranty:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 627\/Credit account 352 (determine the amount of provisions payable).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit accounts 621, 622, 623, 627\/Credit accounts 111, 112, 152, 214, 331 (repair and warranty costs of construction works)<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 154\/Credit account 621, 622, 623, 627 (transfer of repair and warranty costs for construction works).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 352\/Credit account 154 (repair and warranty of completed construction works).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for borrowing costs payable and break-even:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 627\/Credit account 111, 112, 242, 335, 343 (interest on loans payable, paid and capitalized).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for production cost reductions:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 111, 112, 138\/Credit account 627.<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Accounting for production costs used for business cooperation contracts:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Debit account 627, Debit account 133\/Credit account 111, 112, 331 (incurred expenses).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Debit account 138\/Credit account 627, Credit account 3331 (cost allocation).<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Final accounting:<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Enterprises regularly declare: Debit account 154, Debit account 632\/Credit account 627.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Periodic inventory business: Debit account 631, Debit account 632\/Credit account 627.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cac_phuong_phap_phan_bo_chi_phi_san_xuat_chung\"><\/span><b>Methods of allocating manufacturing overhead costs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Manufacturing overhead (CPSXC) is an indirect cost, not associated with a specific product, so <strong>need <\/strong><\/span><strong>rational allocation<\/strong><span style=\"font-weight: 400;\"><strong> into price<\/strong> for accurate calculation. Below are common methods of allocating general manufacturing costs according to each type of business:<\/span><\/p>\n<p><b>\u2013 Single-piece, order-based manufacturing businesses<\/b><\/p>\n<ul>\n<li><b>Direct labor hour allocation method: <\/b><span style=\"font-weight: 400;\">Applicable when manufacturing overhead costs are primarily related to labor.<\/span><\/li>\n<li><b>Allocation method based on direct material cost: <\/b><span style=\"font-weight: 400;\">Suitable when raw materials account for a large proportion of the cost.<\/span><\/li>\n<\/ul>\n<p><b>\u2013 Mass production and continuous production enterprises<\/b><\/p>\n<ul>\n<li><b>Product output allocation method: <\/b><span style=\"font-weight: 400;\">Applicable when the products are homogeneous and the CPSXC is evenly distributed over quantity.<\/span><\/li>\n<li><b>Machine hour allocation method: <\/b>Suitable for businesses with continuously operating machinery systems, general production costs are mainly depreciation and maintenance costs.<\/li>\n<\/ul>\n<p><b>\u2013 Service business<\/b><\/p>\n<ul>\n<li><b>Allocation method based on service revenue: <\/b><span style=\"font-weight: 400;\">Applicable when costs are incurred primarily to serve business operations.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"2\"><b>Allocation method based on employee working hours: <\/b><span style=\"font-weight: 400;\">Suitable for consulting, financial services, auditing businesses...<\/span><\/li>\n<\/ul>\n<figure id=\"attachment_999971521\" aria-describedby=\"caption-attachment-999971521\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-999971521 size-full\" title=\"Manufacturing overhead is an indirect cost that is not tied to a specific product.\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/phan-bo-chi-phi-san-xuat-chung.png\" alt=\"Manufacturing overhead is an indirect cost that is not tied to a specific product.\" width=\"1200\" height=\"700\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/phan-bo-chi-phi-san-xuat-chung.png 1200w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/phan-bo-chi-phi-san-xuat-chung-300x175.png 300w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/phan-bo-chi-phi-san-xuat-chung-1024x597.png 1024w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/phan-bo-chi-phi-san-xuat-chung-768x448.png 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/phan-bo-chi-phi-san-xuat-chung-18x12.png 18w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-999971521\" class=\"wp-caption-text\">Manufacturing overhead is an indirect cost that is not tied to a specific product.<\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"Cach_cat_giam_va_toi_uu_chi_phi_san_xuat_chung\"><\/span><b>How to cut and optimize overall production costs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">In the era of strong technological development, businesses can take advantage of modern technologies and smart management strategies to reduce <strong>overhead<\/strong> (CPSXC) without affecting product quality. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So what are the ways to cut and optimize? <strong>What is manufacturing overhead?<\/strong>? Find out below:<\/span><\/p>\n<p><strong>\u2013 Automation and digitalization of production processes and machinery<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Using automatic machines and robots to replace indirect labor \u2192 Reducing factory management staff<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Applying IoT (Internet of Things) to monitor machinery helps with timely maintenance and reduces repair costs.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"><a href=\"https:\/\/bizzi.vn\/tich-hop-erp\/\"><strong>ERP Software<\/strong><\/a> (Enterprise Resource Planning) to manage production data, materials, human resources, and finances to help optimize operations.<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Integrating AI &amp; Big Data in general production cost management\u00a0<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Predict and optimize energy costs, reduce electricity and water consumption<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Optimize supply chain, help businesses order at the right time to reduce inventory.<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Application of warehouse management technology (WMS \u2013 Warehouse Management System)<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Helps to accurately control the amount of raw materials, avoiding loss and surplus.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Apply Just-in-Time (JIT) method to reduce inventory.<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Apply Lean Manufacturing to optimize overall production costs<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Eliminate redundant steps in production<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Reduce waiting time, optimize production process<\/span><\/li>\n<\/ul>\n<p><strong>\u2013 Smart energy usage (EMS \u2013 Energy Management System)\u00a0<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Monitor and optimize electricity, water, gas consumption<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Switch to <\/span><b>renewable energy<\/b><span style=\"font-weight: 400;\"> like solar power to reduce long-term costs.<\/span><\/li>\n<\/ul>\n<p><b>Summary of technologies to be applied to:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>ERP &amp; AI<\/b><span style=\"font-weight: 400;\"> \u2013 Data management, cost forecasting<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>IoT &amp; Big Data<\/b><span style=\"font-weight: 400;\"> \u2013 Production monitoring, energy optimization<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lean Manufacturing<\/b><span style=\"font-weight: 400;\"> \u2013 Eliminate waste, optimize processes<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Predictive Maintenance<\/b><span style=\"font-weight: 400;\"> \u2013 Reduce maintenance costs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Just-in-Time (JIT)<\/b><span style=\"font-weight: 400;\"> \u2013 Optimize raw materials, reduce inventory.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Chi_phi_san_xuat_chung_la_gi_trong_ke_toan_quan_tri\"><\/span><b>What is manufacturing overhead in management accounting?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><b>\u2013 Reasonable product pricing<\/b><span style=\"font-weight: 400;\">: General production costs are an important factor in product cost, helping businesses set reasonable selling prices.<\/span><\/p>\n<p><b>\u2013 Support the production process<\/b><span style=\"font-weight: 400;\">: Provides a basis for making decisions about product production, quantity, and timing to optimize profits.<\/span><\/p>\n<p><b>\u2013 Performance and efficiency assessment<\/b><span style=\"font-weight: 400;\">: Reflects production performance, helps businesses detect waste and save costs.<\/span><\/p>\n<p><b>\u2013 Support investment decisions<\/b><span style=\"font-weight: 400;\">: Evaluate the feasibility and effectiveness of new projects or production expansion.<\/span><\/p>\n<p><b>\u2013 Effective budget planning<\/b><span style=\"font-weight: 400;\">:Basis for budget planning<strong> related to general production activities.<\/strong><\/span><\/p>\n<p><b>\u2013 Provide information for management reports<\/b><span style=\"font-weight: 400;\">: Shown in important management reports such as income statements and cost management reports.<\/span><\/p>\n<p><b>\u2013 Comparison between management accounting and conventional accounting<\/b><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ul>\n<li><b>Scope of review<\/b><span style=\"font-weight: 400;\">: Management accounting looks at details and classifies them according to specific activities, departments or products and services. Conventional accounting may summarize them into general accounts without classifying them in detail.<\/span><\/li>\n<li><b>Purpose of information use<\/b><span style=\"font-weight: 400;\">: Management accounting is used to effectively manage and optimize production operations, make pricing and product decisions. Conventional accounting is used to calculate product costs and financial statements.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Lien_he_voi_Bizzi_kiem_soat_chi_phi_san_xuat_hieu_qua\"><\/span><b>Contact Bizzi for effective production cost control<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Effective management of overhead costs requires long-term planning, close monitoring and the application of technology. If optimized well, businesses can reduce product costs, increase profits while maintaining quality.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Technology is the key to streamlining and automating the process. <strong><a href=\"https:\/\/bizzi.vn\/quan-ly-chi-phi\/\">business cost management<\/a><\/strong>, contributing to sustainable success in today&#039;s competitive landscape. Bizzi is a comprehensive cost management platform, the leading solution chosen by talented leaders.\u00a0<\/span><\/p>\n<figure id=\"attachment_999971409\" aria-describedby=\"caption-attachment-999971409\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-999971409\" title=\"Bizzi helps businesses control production costs effectively\" src=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Quan-ly-chi-phi-doanh-nghiep-hieu-qua-voi-Bizzi-Expense.png\" alt=\"Bizzi helps businesses control production costs effectively\" width=\"1200\" height=\"893\" srcset=\"https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Quan-ly-chi-phi-doanh-nghiep-hieu-qua-voi-Bizzi-Expense.png 1024w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Quan-ly-chi-phi-doanh-nghiep-hieu-qua-voi-Bizzi-Expense-300x223.png 300w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Quan-ly-chi-phi-doanh-nghiep-hieu-qua-voi-Bizzi-Expense-768x572.png 768w, https:\/\/bizzi.vn\/wp-content\/uploads\/2025\/03\/Quan-ly-chi-phi-doanh-nghiep-hieu-qua-voi-Bizzi-Expense-16x12.png 16w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-999971409\" class=\"wp-caption-text\">Bizzi helps businesses control production costs effectively<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Bizzi Expense is a trusted partner of businesses such as MASAN Group, kewpie, Pierre Fabre with many outstanding advantages such as:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Automate all processes, minimize time spent gathering documents and making payment requests<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reconcile and manage costs against policies and budgets in real time<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Save and optimize time and costs on human resources and materials.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Intuitive and user-friendly interface, making it easy to record, track and manage expenses<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Support anytime, anywhere, design and optimize the system based on business needs<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Ready to take control of your business finances? <\/span><a href=\"https:\/\/bizzi.vn\/dat-lich-demo\/\"><span style=\"font-weight: 400;\">Schedule a demo <\/span><\/a><span style=\"font-weight: 400;\">with Bizzi today and discover how our innovative solutions can help you navigate the complexities of manufacturing overhead management with ease.<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b><i>Contact Bizzi now to learn about the ability to digitize and automate revenue and expenditure transactions for your business: https:\/\/bizzi.vn\/dang-ky-dung-thu\/\u00a0<\/i><\/b><\/li>\n<\/ul>\n<p><strong>Read more:<\/strong><\/p>\n<ul>\n<li><strong><a href=\"https:\/\/bizzi.vn\/chi-phi-san-xuat-la-gi\/\">What is the cost of production?<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/bizzi.vn\/chi-phi-quan-ly-doanh-nghiep-la-gi\/\">What are business costs? Types of costs in business<\/a><\/strong><\/li>\n<\/ul>","protected":false},"excerpt":{"rendered":"<p>General production costs account for a large proportion of total production costs, so good control of these costs will help\u2026<\/p>","protected":false},"author":56,"featured_media":999971508,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[263],"tags":[],"class_list":["post-999971507","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kien-thuc"],"acf":[],"_links":{"self":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts\/999971507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/comments?post=999971507"}],"version-history":[{"count":11,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts\/999971507\/revisions"}],"predecessor-version":[{"id":999977034,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/posts\/999971507\/revisions\/999977034"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/media\/999971508"}],"wp:attachment":[{"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/media?parent=999971507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/categories?post=999971507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bizzi.vn\/en\/wp-json\/wp\/v2\/tags?post=999971507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}