Many businesses charge overheads to jobs on a cost centre basis.

Required:

(a) What is the advantage that is claimed for charging overheads to jobs on a cost centre basis and why is it claimed?

(b) What circumstances need to exist for it to make a difference to a particular job whether overheads are charged on a business-wide basis or on a cost centre basis? (Note that the answer to this part of the question is not specifically covered in the chapter. You should, nevertheless, be able to deduce the reason from what you know.)

Advanced-level exercises AppendixLO1