ACCOUNTING AND CONTROL OF ADMINISTRATIVE OVERHEADS

Definition - According to I.C.M.A. Terminology, Administrative overhead is defined as “The
sum of those costs of general management and of secretarial accounting andadministrative services, which cannot be directly related to the production, marketing,
research or development functions of the enterprise.” According to this definition,
administrative overhead constitutes the expenses incurred in connection with the
formulation of policy directing the organisation and controlling the operations of an
undertaking. These overheads are also collected and classified in the same way as the
factory overheads.