Following is the Top Overheads Question Answer.

Overheads Question Answer (Cost Accounting)
1. What is meant by overheads?
Answer: The aggregate of indirect material cost, indirect wages, and indirect expenses are known as overhead.
2. What do you understand by fixed overhead?
Answer: Fixed overhead remains unchanged up to a fixed level of production and is related to time factor rather than production factor.
3. Explain variable overhead?
Answer: The cost which increases or decreases in proportion production activities is known as variable overhead.
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4. What is semi-variable overhead?
Answer: Overhead which does not increase or decrease in proportion to production activities is known as semi-variable overhead.
5. Examples of variable overheads?
Answer:
- Fuel and power
- Royalty
- packing expenses
- commission of traveling agents.
6. Difference between fixed and variable overhead?
Answer:
- Fixed overhead remain fixed irrespective of changes in production while variable overhead varies in direct proportion to changes in the production.
- Fixed overhead related to time while variable overhead is related to production units.
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7. What is meant by the functional specification of the indirect cost?
Answer:
- Functional classification of overheads are:
- Factory or work overhead
- Office or administration overhead and
- Selling and distribution overhead.
8. Give 5 Examples of Factory Overhead?
Answer:
- Factory rent, rates, and insurance.
- Factory lighting.
- Work manager salary.
- Depreciation of factory building.
- Drawing office salaries. 🙂
9. Give 5 examples of Office Overhead?
Answer:
- Office rent, rates, and Taxes.
- Staff salaries.
- Printing and stationery.
- Postage and telephone charges.
- Depreciation of office building and furniture.
10. Give 5 examples of Distribution overhead?
Answer:
- Packing expenses.
- Rent of Warehouse.
- Warehouse insurance.
- Delivery Van expenses.
- Salary of Watchman of the house.
11. What do you mean by the allocation of overhead?
Answer: It is the allotment of all items of cost to cost centers or cost units.
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12. Explain apportionment of overhead?
Answer: It refers to the allotment of the proportion of items to cost centers or cost units.
13. What do you understand by secondary appointment?
Answer: When overhead of service centre is apportioned on production Centre is known as secondary apportionment.
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14. Difference between apportionment and absorption of factory overhead?
Answer: When the amount of factory overhead is related to a specific department is known as allocation of expenses and if expenses are not specifically related to a particular department required to apportionment on judicial manner.
15. Difference between overhead and cost?
Answer: Overhead means aggregate on the indirect material, indirect labour, and indirect expenses while on Cost means part of overhead charged to production.
Top 15 Overheads Question Answer (Cost Accounting)⇑
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