In this article we will discuss about the meaning and methods of overhead absorption. Meaning of Overhead Absorption: CIMA defines Absorption of Overheads as "the process of absorb, overhead costs allocated or apportioned over a particular cost centre or production department by the units produced". Absorption of overheads refers to charging of overheads to individual products or jobs. It is [...]
In this article we will discuss about selling and distribution overheads. Selling Overhead: The selling cost refers to the cost of selling function i.e. the cost of activities relating to create and stimulate demand for company's products and to secure orders. The selling costs include the following: (a) Salaries, commissions and travelling expenses to sales staff, (b) Remuneration of sales [...]
The below mentioned article provides a note on administration overhead. According to ICMA Terminology, Administrative overhead is defined as "the sum of those costs of general management and of secretarial accounting and administrative services, which cannot be directly related to the production, marketing, research or development functions of the enterprise." The administration cost is incurred for carrying the administrative function [...]