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Types of overheads

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 asked

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

> Types of Overheads --Cost pertaining to a cost centre or cost unit may be divided into two portions direct and indirect. The indirect portion of the total cost constitutes the overhead cost which is the aggregate of indirect material cost, indirect wages and indirect expenses. CIMA defines indirect cost as “expenditure on labour, materials or services which cannot be conveniently identified with a specific saleable cost per unit.” --The various classifications are: **(i) Functional classification,** (a) Manufacturing Overhead, (b) Administration Overhead, (c) Selling Overhead, (d) Distribution Overhead, and (e) Research and Development Expense **(ii) Classification with regard to behaviour of the expenditure,** (a) Fixed overhead, (b) Variable overhead, (c) Semi-variable or Semi­-fixed overhead. **(iii) Element-wise classification,** (i) Indirect Materials; (ii) Indirect Labour; and (iii) Indirect Expenses **(iv) Classification according to nature of expenditure**

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

**TYPES OF OVERHEADS** As per elements Indirect material Indirect labour Indirect expenses As per function MAnufacturing or factory overheads Administration or office overheads Selling overheads Distribution overheads As per behaviour Fixed overhead Variable overhead Semi-variable overhead Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

Hello types of Overheads Production overheads Relates to those indirect costs incurred to produce the products Examples: indirect materials, indirect wages, factory rent and factory insurance and factory depreciation of plant and machinery Administration overheads Relates to those costs on office/administrative supports. Examples: office salaries, stationery, office rent, office maintenance, audit fees Selling overheads Relates to those costs on the selling of the products Examples like salesmen’s salaries, commissions, incentives and traveling expenses.

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Open uri20170510 32134 tcchcu?1494421832 answered

Hiii friend.... Classification Of Overheads --------------------------- Overheads can be classified on different basis. The common basis of classifying overheads are as follows. **1.Classification Of Overheads Based On Function** * Manufacturing Overheads * Non-manufacturing overheads **2.Classification Of Overheads Based On Behavior** * Fixed Overheads * Variable Overheads * Semi-variable Overheads * Semi-fixed Overhead **3. Classification Of Overheads Based On Elements** * Indirect Materials * Indirect labor (Wages) **4. Classification Of Overheads Based On Control** * Controllable Overheads * Uncontrollable Overheads Regards, Jitendra Suthar

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