{"id":500,"date":"2020-11-23T00:36:59","date_gmt":"2020-11-22T19:06:59","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=500"},"modified":"2025-10-02T16:27:25","modified_gmt":"2025-10-02T10:57:25","slug":"overheads-cost-accounting","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/","title":{"rendered":"Overheads Cost Accounting | BCOM, BAF, BMS (Free Lectures)"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e20a2669e5a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e20a2669e5a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/#Overheads_Cost_Accounting\" >Overheads Cost Accounting<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/#Overheads\" >Overheads<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/#Element_Wise\" >Element Wise<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/#Function_Wise\" >Function Wise<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/#Behaviour_wise\" >Behaviour wise<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Overheads_Cost_Accounting\"><\/span>Overheads Cost Accounting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overheads\"><\/span>Overheads<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The third important element of costs of any product or service is overhead. Overheads may be manufacturing or non-manufacturing. Later, we briefly discuss the classification of overheads.<\/p>\n\n\n\n<p>Before that, let us see what overheads are. Defining overheads particularly focuses on the concept of direct and indirect expenses, which in turn depend on the traceability of the expenses with the product or service. In other words, expenses that cannot be directly traceable to any product or service are known as overheads. Simply, overheads are the sum of all indirect expenses, i.e.<\/p>\n\n\n\n<p><strong>Overheads = Indirect materials + Indirect labour + Indirect expenses<\/strong><\/p>\n\n\n\n<p><strong>Classification of <a href=\"https:\/\/youtube.com\/playlist?list=PLJ_81_DlRlyfya-qJBFNCGDo694oYD3HM\" data-type=\"URL\" data-id=\"https:\/\/youtube.com\/playlist?list=PLJ_81_DlRlyfya-qJBFNCGDo694oYD3HM\" target=\"_blank\" rel=\"noopener\">overheads<\/a><br><\/strong>In general, overheads may be classified as Overheads<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Element_Wise\"><\/span>Element Wise<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a) Indirect Material <br>b) Indirect Labour <br>c) Indirect Expense<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Function_Wise\"><\/span>Function Wise<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a) Factory Overhead <br>b) Office &amp; Administrative Overhead <br>c) Selling &amp; Distribution<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Behaviour_wise\"><\/span>Behaviour wise<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a) Variable Overhead <br>b) Fixed Overhead <br>c) Semi-variable Overhead<br><br>Functional classification- Functionally, overheads are classified into Factory overheads, Office and Administrative overheads, and Selling and Distribution overheads. Factory overhead is actually manufacturing overhead, while other two are non-manufacturing overhead. Factory rent and taxes, indirect wages, are examples of factory overhead while, salary of office staff is an example of office and administrative overhead, and commission of salesmen is an example of selling and distribution overhead.<\/p>\n\n\n\n<p><br>Behavioural Classification- On the basis of behaviour, overheads can be classified as variable overhead, fixed overhead and semi-variable overhead.<\/p>\n\n\n\n<p>Variable overheads are those overheads that vary in direct proportion with the level of activity. For example, indirect wages, salesmen\u2019s commission, etc.<\/p>\n\n\n\n<p>Fixed Overheads- are those overheads that remain fixed irrespective of the level of activity within a relevant range. For example, factory rent.<\/p>\n\n\n\n<p>Semi-variable Overhead- are those overheads that vary with the level of activity but not in direct proportion. Examples are repair and maintenance, electricity charges, etc.<\/p>\n\n\n\n<p>Learn the complete chapter of <a href=\"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/overheads-cost-accounting\/\">Overhead<\/a> Cost Accounting from our <a href=\"https:\/\/youtube.com\/playlist?list=PLJ_81_DlRlyfya-qJBFNCGDo694oYD3HM\" data-type=\"link\" data-id=\"https:\/\/youtube.com\/playlist?list=PLJ_81_DlRlyfya-qJBFNCGDo694oYD3HM\" target=\"_blank\" rel=\"noopener\">videos<\/a>.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/gantt-task-and-bonus-plan\/\">Gantt Task and Bonus Plan<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/rowan-premium-plan-labour-cost\/\">Rowan Premium Plan<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":726,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[7],"tags":[218,267],"class_list":["post-500","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-degree-college","tag-overheads-cost-accounting","tag-overheads-tybcom"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=500"}],"version-history":[{"count":18,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/500\/revisions"}],"predecessor-version":[{"id":38095,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/500\/revisions\/38095"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/726"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}