Q.What do you mean by overheads? State the three elements of overhead.

Showing the 12 most recent of 13 on this concept.

1. CBSE 2024Set ANNUAL1 mark
   Q.Fill up the blanks :

   (xii) Salary paid to General Manager is an item of ________ expenses.

   ›Reveal solutionSolution

   The blank is administrative (office) overhead.

   Overheads are classified by function into factory, office/administration and selling & distribution overhead. The General Manager oversees the general administration of the whole enterprise rather than a specific factory or sales activity, so his salary is charged to OFFICE & ADMINISTRATION overhead (an indirect administrative cost).

   ✓Final answer

   Salary paid to the General Manager is an item of administrative (office) overhead expenses.

2. CBSE 2023Set ANNUAL1 markMCQ
   Q.Repairs to plant is a / an :

   (a) Office overhead

   (b) Factory overhead

   (c) Selling overhead

   (d) Distribution overhead

   ›Reveal solutionSolution

   Repairs to plant is a Factory (works) overhead.

   Overheads are classified by function. Plant and machinery is used in the factory to carry on production, so any cost of maintaining it is an indirect manufacturing cost.

   • Factory/works overhead — indirect costs of the factory: repairs to plant, factory rent, power, works manager's salary. ✓

   • Office overhead relates to administration; selling overhead to creating demand; distribution overhead to despatch/delivery — none fits plant repairs.

   ✓Final answer

   Option (b) Factory overhead.

3. CBSE 2023Set ANNUAL1 mark
   Q.Answer the following questions in one sentence each :

   (iv) What is overhead?

   ›Reveal solutionSolution

   Overhead = indirect material + indirect labour + indirect expenses.

   Overhead (also called “on-cost” or indirect cost) is the aggregate of all indirect costs — indirect materials, indirect wages and indirect expenses — which cannot be conveniently identified with and charged directly to a specific job, product or cost unit, and so must be apportioned and absorbed.

   This is a one-sentence CHSE Odisha +2 Class-12 Cost Accounting definition item.

   ✓Final answer

   Overhead is the aggregate of indirect material cost, indirect labour cost and indirect expenses that cannot be charged directly to a specific cost unit.

4. CBSE 2023Set ANNUAL1 mark
   Q.Fill in the blanks :

   (xii) ______ expenses are used interchangeably for overhead.

   ›Reveal solutionSolution

   Fill in: Indirect (expenses).

   Overhead is, by definition, the aggregate of indirect costs that cannot be charged directly to a cost unit. Hence the terms "overhead" and "indirect expenses" (also "on-cost" or "burden") are used interchangeably in cost accounting.

   ✓Final answer

   Indirect expenses are used interchangeably for overhead.

5. CBSE 2022Set ANNUAL1 markMCQ
   Q.Office rent is a / an :

   (a) Works overhead

   (b) Office overhead

   (c) Selling overhead

   (d) Distribution overhead

   ›Reveal solutionSolution

   Functionally, office rent is the cost of housing the administrative office, so it is an office/administration overhead — option (b).

   In this +2 Class-12 Cost Accounting (CHSE Odisha, aligned with the NCERT/CBSE commerce curriculum) item, overheads are grouped by function:

   • Factory / works overhead — indirect costs of the factory (factory rent, power, works manager salary).
   • Office / administration overhead — indirect costs of general management and the office (office rent, office salaries, printing, stationery).
   • Selling overhead — costs of creating demand (advertising, salesmen salary).
   • Distribution overhead — costs of delivering goods (carriage outward, warehouse cost).

   Rent paid for the office building is clearly an administrative expense.

   ✓Final answer

   Option (b) Office overhead.

6. CBSE 2022Set ANNUAL1 markMCQ
   Q.Carriage outward is, a / an :

   (a) Factory oncost

   (b) Office oncost

   (c) Administrative oncost

   (d) Distribution oncost

   ›Reveal solutionSolution

   Carriage outward = freight on sending finished goods out to customers = a distribution overhead (oncost) — option (d).

   In +2 Class-12 Cost Accounting (CHSE Odisha), 'oncost' simply means overhead. Note the direction of carriage:

   • Carriage inward — freight on bringing in raw materials; a part of material cost / factory oncost.
   • Carriage outward — freight on dispatching finished goods to customers; a distribution overhead.

   Since the question asks about carriage outward, it is a cost of getting the product to the buyer.

   ✓Final answer

   Option (d) Distribution oncost.

7. CBSE 2022Set ANNUAL1 markMCQ
   Q.Factory rent is :

   (a) Office overhead

   (b) Selling overhead

   (c) Works overhead

   (d) Distribution overhead

   ›Reveal solutionSolution

   Rent of the factory building is an indirect cost of manufacturing, so it is a works (factory) overhead — option (c).

   In +2 Class-12 Cost Accounting (CHSE Odisha, NCERT/CBSE-aligned), overheads are grouped by function. Rent connected with the factory premises is incurred to carry on production, so it is a works/factory overhead — as opposed to office rent (administration), or costs of selling/distribution.

   ✓Final answer

   Option (c) Works overhead.

8. CBSE 2022Set ANNUAL1 markMCQ
   Q.Salaries to the driver of delivery van, is :

   (a) Selling overhead

   (b) Distribution overhead

   (c) Works overhead

   (d) Office overhead

   ›Reveal solutionSolution

   A delivery van delivers finished goods to customers, so the driver's salary is a distribution overhead — option (b).

   In +2 Class-12 Cost Accounting (CHSE Odisha), distribution overheads are the costs of making the finished product reach the customer — carriage outward, warehousing, and the running of delivery vehicles (including drivers' wages). Selling overhead, by contrast, is about creating demand (advertising, salesmen).

   ✓Final answer

   Option (b) Distribution overhead.

9. CBSE 2022Set ANNUAL1 markMCQ
   Q.Cost of warehousing is a :

   (a) Distribution cost

   (b) Selling cost

   (c) Administrative cost

   (d) Manufacturing cost

   ›Reveal solutionSolution

   Storing finished goods in a warehouse before delivery is a distribution cost — option (a).

   In +2 Class-12 Cost Accounting (CHSE Odisha), distribution overheads cover getting finished goods to customers — which includes warehousing of finished stock, carriage outward and delivery. It is not a selling cost (demand creation), not administrative, and not manufacturing.

   ✓Final answer

   Option (a) Distribution cost.

10. CBSE 2020Set ANNUAL1 markMCQ
    Q.Classification of overheads into fixed and variable comes under

    (a) function-wise

    (b) behaviour-wise

    (c) element-wise

    (d) both

    (i) and (ii)

    ›Reveal solutionSolution

    Fixed/variable is a behaviour-wise classification of overheads — option (b).

    Overheads can be classified several ways in the CHSE Odisha +2 Cost Accounting course:

    Basis	Classes
    Function-wise	Factory, office, selling & distribution
    Element-wise	Indirect material, indirect labour, indirect expenses
    Behaviour-wise	Fixed, variable, semi-variable

    Fixed and variable describe how cost reacts to volume (fixed stays constant, variable moves with output), which is behaviour. Hence option (b).

    ✓Final answer

    Option (b) behaviour-wise.

11. CBSE 2020Set ANNUAL1 mark
    Q.Correct the underlined portion of the following sentence: Rent of office building is a variable cost.

    ›Reveal solutionSolution

    'Variable' is wrong — rent of an office building is a fixed cost.

    A variable cost changes in total with output; a fixed cost stays constant over a range of activity. Office building rent is payable at a fixed amount per period regardless of how many units are produced, so it is a classic fixed cost.

    ✓Final answer

    Rent of office building is a fixed cost.

12. CBSE 2020Set ANNUAL1 mark
    Q.Answer in one sentence: Define overheads.

    ›Reveal solutionSolution

    Overheads are the total of all indirect costs (indirect material + indirect labour + indirect expenses).

    Overhead is the sum of indirect material cost, indirect labour cost and indirect expenses. These are costs that are incurred for the business as a whole and cannot be traced wholly to a single unit of output, so they must be apportioned and absorbed. Examples are factory rent, depreciation, supervision and power.

    ✓Final answer

    Overheads are the aggregate of all indirect costs - indirect material, indirect labour and indirect expenses - that cannot be conveniently identified with and charged directly to a particular product or job.