Commercial Applications
In element-wise classification of overheads, which one of the following is not included in?
- Fixed overheads
- Indirect labour
- Indirect materials
- Indirect expenditure
Cost
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Answer
Fixed overheads
Reason — Element-wise classification of overheads includes (a) indirect material, (b) indirect labour, and (c) indirect expenses. "Fixed overheads" is a classification on the basis of behaviour (along with variable overheads and semi-variable overheads), not on the basis of element. Therefore, fixed overheads do not belong to the element-wise classification.
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