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Sir, sorry to disturb you again and again but only you are my assistant.
Question:
In a factory operating job costing which of the following costs will be overheads allocated to individual cost centres?(1) Salaries of supervisors, each of whom are responsible for two cost centres, where no record is kept of their time in each cost centre
(2) Wages of skilled operators assigned to individual jobs, in particular cost centres, with time recorded on time sheets
(3) Wages of labourers who are moved from cost centre to cost centre and who maintain detailed time sheets. They are not assigned to work on specific orders in each cost centre.
Answer is 3 only.
Why first and second are wrong and why third is correct?No worries.
1 Cannot allocate between the two cost centres as no time records are kept, so that must be wrong.
2 These are direct costs, not overheads.
3 Time sheets allow splitting between cost centres but not to individual pieces of production. Therefore overheads.
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