customers. It includes all expenditure incurred from time of product is complete until it reaches its destination. E.g.: Packing costs, insurance of goods in transit, warehouse expenses. Differences between Selling Overhead and Distribution Overhead: Sr Selling Overhead Distribution Overhead It is incurred for promoting sales. It is incurred in moving goods from 1 the company's godown to customer's place. The object of selling overhead is to solicit the! The object of distribution expenses Orders and to make efforts to find and retain is the safe delivery of the product to customers. the customer. Absorption of Selling and Distribution Overhead: The following methods are usually adopted for the absorption of selling and distribution, expenses. A Rate per unit: under this method the total estimated selling and distribution overhead is divided by the estimated number of units to be sold. This gives rate per unit sold. A percentage of selling price: on the basis of past records a percentage of selling and distribution overheads to sales is determined A percentage on works cost: In this method a percentage of selling and distribution overhead for works cost is ascertained. This percentage is used to recover selling & Distribution overhead. Control of Factory Overheads: Control of factor verheads involves following steps: Overheads sh be classified according to variability: (fixed, variable and semi-variable) Overhead cost should be budgeted by each classification and department: The budgets are determined with reference to budgeted level of activity of that department Actual overheads should be collected and classified in the same frame work as budget Due to introduction of standard costing, the variance between actual and standard costs are analysed and reported for corrective action Calculate normal and overtime wages payable to a workman from the following data: Days Hours worked Monday 8 Tuesday 11 Wednesday 9 Thursday 10 Friday 10 Saturday 4 537 vurmal working hours: 8 hours per day; Normal rate: Rs.5 per hour. Overtime rate upto 9 hours in a day at single rate and over hours in a day at double rate (or) upto 48 hours in a week at single rate and over 48 hours at double rate whichever is more beneficial to the worker