by Overhead Distribution Summary is a systematic statement that allocates and distributes overhead costs among different departments within an organization. It includes both primary distribution, where overheads are initially assigned to various production and service departments, and secondary distribution, where service department costs are reallocated to production departments. The summary ensures accurate cost allocation, aiding in pricing, budgeting, and cost control. It categorizes expenses like rent, wages, depreciation, and utilities, distributing them based on relevant criteria. This process enhances cost transparency, helping businesses determine product costs effectively and maintain financial efficiency.
Statement of Overhead Distribution Summary:
| Particulars |
Production Dept. A |
Production Dept. B |
Service Dept. X |
Service Dept. Y |
Total |
|---|---|---|---|---|---|
| Direct Overheads | 50,000 | 40,000 | 30,000 | 20,000 | 140,000 |
| Indirect Wages | 20,000 | 15,000 | 10,000 | 5,000 | 50,000 |
| Rent & Utilities | 15,000 | 12,000 | 8,000 | 5,000 | 40,000 |
| Depreciation | 10,000 | 8,000 | 5,000 | 3,000 | 26,000 |
| Miscellaneous Costs | 5,000 | 3,000 | 2,000 | 1,000 | 11,000 |
| Total Overheads | 100,000 | 78,000 | 55,000 | 34,000 | 267,000 |
