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Accounting for overhead expenditure

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Management and Cost Accounting

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Abstract

After studying this chapter, you should be able to:

  • explain why departmental overhead rates should be used in preference to a single blanket overhead rate;

  • construct an overhead analysis sheet and calculate departmental overhead absorption rates;

  • justify why predetermined overhead rates should be used in preference to actual. overhead rates;

  • calculate and explain the accounting treatment of the under/over recovery of overheads;

  • describe the three different capacity measures which can be used to calculate overhead absorption rates;

  • record inter-service department transfers using one of the methods described in Appendix 4.1;

  • describe the six different methods of overhead recovery.

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Author information

Authors and Affiliations

  1. Huddersfield Polytechnic, UK

    Colin Drury (Reader in Accountancy and Finance)

Authors
  1. Colin Drury
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© 1992 J.C. Drury

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Drury, C. (1992). Accounting for overhead expenditure. In: Management and Cost Accounting. Springer, Boston, MA. https://doi.org/10.1007/978-1-4899-6828-9_4

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  • DOI: https://doi.org/10.1007/978-1-4899-6828-9_4

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-0-412-46390-7

  • Online ISBN: 978-1-4899-6828-9

  • eBook Packages: Springer Book Archive

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