Administrative Overheads Homework Help
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Apart from goods and services and manufacturing cost, there are a lot more expenses in a firm. on small scale and large-scale basis, these costs are inevitable and hence cannot be ignored too. The development of products and goods is taken care by a special set of costs and other entities like salaries, wages, stationeries etc. comes under overhead costs. Students who are studying overhead costs have a better scope of doing the job in the field of accounting and auditing. We enhance their interest in the subject by delivering them the simplest Administrative Overheads Homework Help online.
What are administrative overheads?
In our Administrative Overheads homework Help we define the following elements as the overhead costs.
• Wages, commissions, and salaries of staffs
• Office stationery supplies
• Auditing fees for external parties
• Office lease costs
• Administration and sales utilities cost
• Telephone bills and costs
• Travel expenses and entertainment costs for employees
Administrative overheads are also termed as period costs as in future periods these costs does not carry forward the benefits.
Now as our Administrative Overheads homework Help team experts suggest administrative over heads are
i. The cost used in making the policies for directing and controlling an operation
ii. Any expense excluding the production and service costs
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Treatment methods for administrative overheads
There are three different methods defined for treating the over head expenses. They are compiled by our Administrative Overheads homework Help team down below
1. First method: The administrative over heads are supposed to transfer to the costing profit and loss account, under this method. As there is no relation between administrative expenses and the productions and sales expenses, this transfer can be justified by assuming the administrative expenses of fixed nature. Over these assumptions only administrative over heads are called as period costs that need to be stated under the costing profit and loss account.
2. Second method: apportion between productions and selling distribution is made in this method. An assumption is taken in this method as the administrative overheads occur in both the production and selling and distribution sector. A demerit with this method is the choosing of appropriate bases over which different administrative expenses have been apportioned. To the production and selling and distribution account, this apportioned distribution is a major difficulty.
3. Third method: just like the treatment of production or sales and distribution expenses, administrative expenses are also treated as a separate function under this method. Our Administrative Overheads homework Help team experts have worked in various departments and hold the knowledge to represent their work.
Basis of apportionment
The apportionment is not done haphazardly, and a procedure is followed by taking some parameters into consideration. They are
1. Floor space consumed by each department
2. The total original cost of assets owned by a company
3. Status of various employees and their posts at different departments
4. Time spent by employees by various departments,
5. Works cost, and
6. Sales or total cost.
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