ECONOMICS

Detailed explanation-1: -Manufacturing overhead does not include any of the selling or administrative functions of a business. Thus, the costs of such items as corporate salaries, audit and legal fees, and bad debts are not included in manufacturing overhead.

Detailed explanation-2: -The process of redistribution of cost of service departments among production departments on suitable basis is known as secondary distribution.

Detailed explanation-3: -The costs of service departments are allocated to the operating departments because they exist to support the operating departments. Examples of service departments are maintenance, administration, cafeterias, laundries, and receiving.

Detailed explanation-4: -Time-keeping department is rendering services to two production departments and two other service departments, stores department is rendering services to maintenance department along with production departments and maintenance department is rendering services to production departments only.