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Group No: 9
Presented By:
Dr.Himanshu Verma( 02 )
Shreshtha Kanojia( 19 )
Dr. Nitin Yeola ( 32 )
Nupur Kaul( 39 )
Shubhra Patankar( 59 )
Symbiosis Institute of Health Sciences, Radhika Iyer( 87 )
Pune
What is Overhead Cost ?
All the expenses over and above the prime cost are known as
overhead charges.
they remain constant. They are related to periods, and so the fixed costs are known as
the period costs.e.g. the rent of the building or salaries of the office staff
Variable overheads- Tend to follow the level of activity, the variation may not be
always in the same proportion as the production or sales volume changes, but by the
large there is a linear relationship,between the variable overhead charges ,the cost of
e.g. indirect material, indirect labour, power & fuel, lighting and heating expenses
Formula:
Over absorption
Overheads absorbed in the production are more than the actual
overheads incurred, if actual expenses fall short of the amount
absorbed, there is a said to be an over absorption of overheads.
Under absorption
Production are less than the actual overheads incurred, if actual
expenses exceed the amount of overheads absorbed in the
production, then there is a case of under absorption.