Chapter 4 - Overheads And Expenses Flashcards
1
Q
What costs form the overheads of a business ?
A
Indirect costs
2
Q
What must all the overhead costs of a business be covered by ?
A
The revenue from the businesses output
3
Q
Larger businesses may classify their overheads by ………….?
A
**Function **
4
Q
What are the four most common functions a larger business would classify their overheads under ?
A
- Factory or production
- Selling and distribution
- Administration
- Finance
5
Q
What are the four responsibility centres overheads can be allocated to ?
A
- Cost centres
- Profit centres
- Investement centres
- Revenue centres
6
Q
What happens to overheads that can not be allocated to one particular cost centre ?
A
They have to be shared / apportioned between the cost centres that have shared the benefits of the relevamt cost
7
Q
What is the difference between allocation and apportionment of overheads ?
A
- Allocation - One particular cost centre
- Apportionment - Spread across multiple cost centres
8
Q
A
