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Accounting for overheads

Accounting for overheads

Session 12: Accounting for overheads

Accounting for overheads

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  • In this session the chapter Accounting for overheads have been explained. The chapter consists of

    • Overheads
    • Cost allocation
    • Cost apportionment
    • Bases of apportionment
    • Apportionment of service cost centre overheads to production cost centres
    • Calculation of Overhead Absorption Rates (OAR)
    • Overhead cost sharing process
    • Over absorption and under absorption of overheads
    • Reasons for over or under absorption
    • Drawbacks of using a budgeted overhead absorption rate
    • Factory wide rate
    • Benefits of absorption costing
    • Limitations of absorption costing
    • Examples

    The notes and examples have been uploaded in the exercise section.

  • Session 12: Accounting for overheads

  • Excercise Files

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