Apportionment of overhead expenses of the cost centers to cost units by using recovery rates of over...........

Costing - Phase (I & II) Overview of Cost and Management Accounting

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Apportionment of overhead expenses of the cost centers to cost units by using recovery rates of overheads is known as:

Apportionment of Overheads

Allocation of overheads

Absorption of overheads

None of the above

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Explanation:

Apportionment of overhead expenses of the cost centers to cost units by using recovery rates of overheads is known as absorption of overheads. For example, factory overheads are absorbed on the basis of direct labour cost, administrative overheads are absorbed on the basis of works cost etc.