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Acc Accountancy

AccountancyNEB 2082

Classify the overhead on the basis of control.

1

Answer

· Based on the official syllabus and past papers
Updated

Overheads can be classified on the basis of control into two categories:

  1. Controllable Overheads: These are the overheads that can be influenced or controlled by the management of a particular department or cost center. Examples include departmental salaries, departmental supplies, and departmental depreciation.

  2. Uncontrollable Overheads: These are the overheads that cannot be influenced or controlled by the management of a particular department or cost center. They are generally controlled by the top management. Examples include rent, rates, taxes, insurance, and general administration expenses.

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