Methods of Overhead Absorption There are various methods of absorption of factory overhead. Some of the methods are briefly explained below. 1. Production Unit or Cost Unit Method
Selling and Distribution Overhead Selling and Distribution overhead is the combination of two words ie Selling overhead and Distribution overhead. What is Selling Overhead? Selling overhead is the
Over / Under absorption of overhead The overheads are absorbed on the basis of predetermined overhead absorption rate according to the actual production of goods throughout the accounting
What is Administration Overhead? Administration overhead is the indirect expenses incurred relating to the administration of a business concern. The administrative function covers the formulation of business policy,
What are the Elements of Cost in Cost Accounting? The elements that constitute the cost of manufacture are known as the elements of cost. Such element of cost
What is Absorption of Overhead? Overhead absorption is the process of spread over the overhead to the production for a specific period. This is otherwise called as overhead
Secondary distribution of Overhead The production departments do not produce any goods and services without getting any service from the service departments. Hence, there is logic that the
Primary Distribution of Overhead Primary Distribution is the allocation or appointment of different items of overhead to both production and service departments on suitable basis. There is no
What is allocation of Overhead? The overhead, which can be easily identified with a particular department that is charged only to the specified department, is called allocation. There
Collection of Overhead or Factory Overhead The collection of overhead is the process of recording each item of cost in the book of accounts maintained for the purpose