Servicing Departments Department A Department B Department C Maintenance Engineering Producing Departments / Main Department Total Dverhead costs 80,000 90,000 50,000 12,000 54,000 286,000 Engineering hours used Maintenance hours used 800 400 400 400 2,000 800 200 200 400 1,600

Q: Define the term transportation costs.

A: Cost: Cost is that amount which is paid to get something from the any supplier and the amount which…

Q: Distinguish between two methods of allocating common costs.

A: Cost Allocation Method: The cost allocation method is the method by which the costs to be assigned…

Q: Define restructuing costs.

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: How are joint costs allocated? Explain and analyze using numerical example.

A: Joint Costs In business different costs are incurred in the production process, but in certain…

Q: Please explain the calculation of Unit contribution

A: Unit Contribution margin is contribution margin earned per unit It is calculated in 2 ways  Unit…

Q: Name the units of service on which cost-based payers may pay providers

A: Payers- is a company that  pays for or reimburses for medical services availed. For example, the…

Q: Distinguish between indirect costs and direct costs.

A: Direct Costs and Indirect Costs are two important costs. Direct costs are those costs which are…

Q: Discuss ROPs and to tal costs.

A: Answer: ROP is defined as reorder point. This is the inventory level that is to be maintained at the…

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.