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Discuss the topic Overhead Analysis

Discuss the topic Overhead Analysis

Answers

Wilfred
Overhead costs may be analyzed into:

a) Those costs which are directly identifiable with a single cost centre e.g. wages paid to indirect workers who work solely in one cost centre such as the mixing department.

b) Those costs which are incurred as single figure and are then shared amongst the cost centres that made use of the costs e.g., electricity payable to KPLC has to be shared by all departments that benefited out of the bill.

c) The total cost of a single department e.g. the maintenance department will have various cost charged to it for indirect materials, indirect labour and other expenses.
All such costs are classified as overheads and thus recharged to the user departments.
Wilfykil answered the question on August 5, 2019 at 14:32

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