(a) Define the term 'overhead expenses. (b) Explain the meaning of the following terms as they relate...
Question:
(a) Define the term 'overhead expenses".
(b) Explain the meaning of the following terms as they relate to overhead expenditure:
(i) Allocation
(ii) Apportionment.
(c) Explain the meaning of the terms:
(i) Overhead absorption
(ii) Overhead under-absorption
(iii) Overhead over-absorption.
(d) State reasons why a company might recover more in overheads than the amount spent on overheads in the period.
(e) Explain why estimated figures are used to calculate overhead absorption rates.
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Step by Step Answer:
a Overhead Expenses Overhead expenses refer to the indirect costs or expenses that are incurred by a business in its regular operations but are not directly traceable to a specific product department ...View the full answer
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