ECONOMICS

Detailed explanation-1: -Works overheads are recovered 20% of Prime cost. Administrative overheads are recovered 9 per unit of production. Selling and distribution overheads are recovered 12 per unit sold.

Detailed explanation-2: -Administrative overhead is those costs not involved in the development or production of goods or services. This is essentially all overhead that is not included in manufacturing overhead. Examples of administrative overhead costs are the costs of: Front office and sales salaries, wages, and commissions.

Detailed explanation-3: -Administrative Overheads is the cost of all activities relating to general management and administration of an organisation. It is represented by cost of shared services, infrastructure cost and general management cost.

Detailed explanation-4: -Rule 7 of CSR Rules provides that the administrative overheads shall not exceed five percent. of total CSR expenditure of the company for the financial year. It implies that any expenditure on administrative overheads in excess of five percent.

Detailed explanation-5: -General and administrative expenses are also typically fixed costs in nature, as they would stay the same regardless of the level of sales that occur.