Overhead

classification
PARAMJIT SHARMA

Overhead
few more names
•Overhead expenses •Overhead Cost •Overhead Charges •Overhead expenditure •On cost •Supplementary costs •Non-productive costs •Burden Costs •Loading Costs •Indirect Cost
PARAMJIT SHARMA

OVERHEAD

SUM OF INDIRECT MATERIALS,INDIRECT WAGES AND INDIRECT EXPENSES

Cost of Indirect materials, indirect labour and such other Expenses including services which cannot be conveniently charged to specific unit

PARAMJIT SHARMA

Features of Overhead Expenses

•OHEs are indirect Costs •They are common Costs •They include both escapable and inescapable costs •They comprise of cash expenses (rent) and book expenses (Depreciation) •They include Both Production & non- production expenses (AOH &SDOH) •They both fixed and variable
PARAMJIT SHARMA

CONTOL OF OVERHEAD

1 CLASSIFICATION 2 CODIFICATION 3 COLLECTION 4 ALLOCATION & APPORTIONMENT TO COST CENTRES 5 ABSORPTION TO COST OFPRODUCTS ,SERVICES

PARAMJIT SHARMA

Functional

Behaviour

Overhead Classification Elements
Controllability

PARAMJIT SHARMA

Factory

Selling

Functional

Administration

Distribution

PARAMJIT SHARMA

Factory
Indirect Labour

Supervisors, foreman Inspectors Storekeepers Maintenance labour Work's Clerical Welfare Staff Tool Room operator Watch & Ward Staff Works Manager

Indirect Materials
Lubricants Repair Materials Cotton Waste Factory Supplies Hardwares9Screws… Paints etc

Indirect Expenses
Rent, Rates, Insurance Power, lighting, heating Depreciation, repairs & Maintenance of P&M, Furniture, building Canteen, welfare etc
PARAMJIT SHARMA

Administration

Indirect Labour
Office Clerks Accountant ants Managers Secretaries Executives Directors

Indirect Materials
Office Stationery & Printing Office Supplies

Indirect Expenses
Rent, Rates Lighting, heating, cleaning Postage, telephone, courier Depreciation & Maintenance Legal Charges, Audit Fee, Bank Charges PARAMJIT SHARMA

Indirect Materials
Selling Stationery & Printing Catalogues, Price Lists, Samples, Packing Materials

Indirect Labour Sales men Remuneration, Travelling Exp, Agents Comm., Demonstators, Sales Office Clerks

Distribution

Indirect Expenses
Rent Rates and Insurance of Show rooms, Sales Office, Warehouse, Advertising, After Sales Services, Discounts, Bad debts Delivery Expenses, Ware house Expenses, PARAMJIT SHARMA Reconditioning Of Returned Containers

Behavioral Classification

Fixed
Rent Of Building, Property Taxes Salaries, Depreciation, Insurance Audit fee, Certain office Expenses, Pension & PF etc

Variable
Power & Lighting, indirect Materials Indirect Labour Cost Of Lubricants, Internal Transport Overtime Premium, Tools & spare parts

Semi Fixed/Variable Normal Maintenance Wages Of Supervisors Telephone Service Department Power & lighting
PARAMJIT SHARMA

Element wise
Indirect Wages Indirect Materials Fuel Lubricating oil, consumable stores Small tools, Sundry stores Cotton waste Samples, stationery Price lists
Inspectors Supervisors Clerks Salesmen Executives Directors Managers Warehouse staff Store keeper Idle time Overtime Holiday wages Fringe benefits PARAMJIT SHARMA

Indirect Expenses

Rent , Rates, Taxes Insurance Canteen Depreciation Repairs Maintenance heating Power Lighting Hospital, dispensary Distribution

Un-controllable fixed

Controllability

Controllable Variable
PARAMJIT SHARMA

OVERHEAD

FACTORY

ADMIN

SELLING

DISTRIBUTION

IM

IL

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IM

IL

IE

IM

IL

IE

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F

V

F

V

F

V

FV

V

PARAMJIT SHARMA

OVERHEAD

FACTORY

ADMIN

SELLING

DISTRIBUTION

F

V

F

V

F

V

F

V

IM

IL

IE

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IM

IL

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PARAMJIT SHARMA