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

Indirect Materials Indirect Expenses

Lubricants Rent, Rates, Insurance

Repair Materials Power, lighting, heating
Cotton Waste Depreciation, repairs &
Factory Supplies Maintenance of P&M,
Hardwares9Screws… Furniture, building
Paints etc Canteen, welfare etc

PARAMJIT SHARMA
Administration Indirect Labour

Office Clerks
Accountant ants
Managers
Secretaries
Executives
Directors

Indirect Expenses
Indirect Materials
Rent, Rates
Office Stationery & Lighting, heating, cleaning
Printing Postage, telephone, courier
Depreciation &
Maintenance
Office Supplies
Legal Charges, Audit Fee,
Bank Charges

PARAMJIT SHARMA
 Indirect Materials Indirect Labour

Sales men
Selling
Remuneration,
Stationery & Printing Travelling Exp,
Catalogues, Agents Comm.,
Price Lists, Demonstators,
Samples, Sales Office Clerks

Distribution Packing
Materials

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

Variable Semi Fixed/Variable

Power & Lighting, Normal Maintenance

indirect Materials Wages Of Supervisors
Indirect Labour Telephone
Cost Of Lubricants, Service Department
Internal Transport
Power & lighting
Overtime Premium,
Tools & spare parts

PARAMJIT SHARMA
 Indirect
Element wise Expenses

Indirect
Wages
Rent ,
Indirect Rates,
Materials Inspectors
Supervisors Taxes
Clerks Insurance
Salesmen Canteen
Fuel Executives Depreciation
Lubricating oil, Directors Repairs
consumable stores Managers Maintenance
Small tools, Warehouse heating
Sundry stores staff
Power
Cotton waste Store keeper
Idle time
Lighting
Samples, Hospital,
Overtime
stationery dispensary
Holiday wages
Price lists Fringe benefits Distribution
PARAMJIT SHARMA
 Un-controllable
fixed

Controllability

Controllable
Variable

PARAMJIT SHARMA
 OVERHEAD

FACTORY ADMIN SELLING DISTRIBUTION

IM IL IE IM IL IE IM IL IE IM IL IE

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 IMIM ILIL IE IM IL IE IM IL IE

PARAMJIT SHARMA