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Overhead are related to accounting concept. Basically there are two types of business overhead. Administrative overhead and manufacturing overhead. Understanding administrative overhead is not that easy and completing assignment on this topic might get difficult for a student. This is why we have come up with our online service administrative overheads homework help, to make your work easy for you.
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In any organization, administrative overhead is responsible for making policies, giving right directions to the business and for controlling the operations and expenses. Administrative overhead expenses are required to be incurred for the functions of administrative divisions. Activities included in administrative functions are activities of board of directors and secretaries, financial accountants and managers, activities of auditors, personal manager and law officers etc.
Administrative expenses include indirect expenses like rent, taxes, repair and maintenance, salaries and allowances, traveling and conveyances, audit fees paid legal expenses, postage, telegram and telephone expenses, depreciation charges against fixed assets etc. Administrative overheads are not related to production or selling of goods and services. They are basically charges of all the indirect cost like indirect labour, indirect material and indirect expense.
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There are three different methods for the treatment of administrative overhead as listed below
a) Charge to costing profit & loss
b) Apportion between production and selling & distribution
c) Treat as a separate element of total cost
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