Explain the different types of Departmental Expenses and how they are allocated among departments?
Answers
There are three major types of expenses we all pay: fixed, variable, and periodic. Do you know the difference? A “fixed expense” is a cost that does not change from time period to time period, or changes only very slightly.
The expenses which can be specially incurred for a particular departments like salary to salesman, can be charged directly to the department, but the expenses which could not be allocated precisely to a particular department may be divided among the different departments are as follows:
1. Sales Of Each Department
* Salesman's commission
* Discount allowed
* Bad debts
* Carriage Outwards
* Advertisement
* Packing expenses
* Provision for discount on debtors
* Traveling salesman's salary and commission
2. Purchase Of Each Department
* Discount received
* Provision for discount on creditors
* Carriage Inward
* Freight
* Duty
3. Area Of Floor Space Of Each Department
* Rent
* Rates and taxes
* Repair and maintenance Of building
* Insurance on building
* Air conditioning expenses
* Heating
4. Value Of Assets In Each Department
* Depreciation Of Machinery
* Repairs and maintenance of plant
* Insurance premium
5. Number Of Workers
* Workmen's compensation insurance
* Canteen expenses
* Labor welfare expenses
* Time keeping
* Personnel office
* Supervision
6. Direct Wages
* Compensation to workers
* Holiday pay
* Provident fund contribution
* Group insurance premium
7. Number Of Light Points
* Lighting expenses
8. Horse Power Of Machine And /Or Production Hours
* Electric Power
9. Time Devoted By Him For Each Department
* Work manager's salary
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There are three major types of expenses we all pay: fixed, variable, and periodic. Do you know the difference? A “fixed expense” is a cost that does not change from time period to time period, or changes only very slightly.
The expenses which can be specially incurred for a particular departments like salary to salesman, can be charged directly to the department, but the expenses which could not be allocated precisely to a particular department may be divided among the different departments are as follows:
1. Sales Of Each Department
* Salesman's commission
* Discount allowed
* Bad debts
* Carriage Outwards
* Advertisement
* Packing expenses
* Provision for discount on debtors
* Traveling salesman's salary and commission
2. Purchase Of Each Department
* Discount received
* Provision for discount on creditors
* Carriage Inward
* Freight
* Duty
3. Area Of Floor Space Of Each Department
* Rent
* Rates and taxes
* Repair and maintenance Of building
* Insurance on building
* Air conditioning expenses
* Heating
4. Value Of Assets In Each Department
* Depreciation Of Machinery
* Repairs and maintenance of plant
* Insurance premium
5. Number Of Workers
* Workmen's compensation insurance
* Canteen expenses
* Labor welfare expenses
* Time keeping
* Personnel office
* Supervision
6. Direct Wages
* Compensation to workers
* Holiday pay
* Provident fund contribution
* Group insurance premium
7. Number Of Light Points
* Lighting expenses
8. Horse Power Of Machine And /Or Production Hours
* Electric Power
9. Time Devoted By Him For Each Department
* Work manager's salary