How to code overheads
Overheads are coded to the centre that used them. Code indirect costs, split a shared bill and total the Office overheads.
Task 1Overheads go to the centre that used them3 questions
Overheads are the indirect costs: indirect materials, indirect labour and indirect expenses.
Indirect expenses are running costs such as electricity, insurance, telephone and repairs.
| Part of the code | Name | Digits |
|---|---|---|
| Centre | Cutting | 100 |
| Centre | Assembly | 200 |
| Centre | Office | 300 |
| Centre | Showroom | 400 |
| Type of cost | Direct materials | 110 |
| Type of cost | Direct labour | 120 |
| Type of cost | Indirect materials | 210 |
| Type of cost | Indirect labour | 220 |
| Type of cost | Indirect expenses | 230 |
Task 2An overhead shared by several centres3 questions
Task 3A month of Office overheads3 questions