Introduction to overhead

The total expenditure which is incurred in the process of production or providing services is called overhead costs may be classified as : 

A . direct cost 

B. indirect cost .

                        A direct cost :

                     The expenditure which is directly involved in production is called direct cost . This cost is either attributable to or identifiable with  the particulars unit or cost center and  it is the main feature of direct cost . Direct materials , direct labour and direct expenses are included cost . 

                B. Indirect cost :

                 Beside direct expenditure , there are several other expenditure which cannot be identified with a particular unit of cost . these expenditure are incurred the production , but they are not attributable with a particulars unit of output . These expenditure are called indirect expenditures , overhead expenses or establishment expenses. These expenses are incurred inside as well as outside the factory .Rent of building , lighting and heading charge ,office salaries, or selling expenses are examples of indirect cost .    

Difination of centralized stores

 A store where all types of materials required for the organization are kept by one single department is called centralized stores . All the materials required are stored and issued by one single department is called centralized stores . All the materials required are stored and issued by this department only. when some new materials enter the stores , the store informs the departments fresh stocks materials are available for issue. 

            Advantage of centralized stores : 

There are several advantages of centralized stores :

1. minimum investment in stock , 

2.  In centralized stores proper control of materials is possible and comparatively easy , 

3. Less space is required because stocks are kept in minimum quantities , 

4.Not many staffs are required for operation , 

5. As all records are maintained centrally ,

6. Minimization of cost brings economy in storing and production , 

7. The store layout could be planned in systematic way . 

            Disadvantages of centralized stores : 

1. As there is only one store, it is practically difficult to keep near to the entire users department , 

2. Hence , it leads to increase in the cost of carriage , 

3. Transportation of materials is delayed if the store department is situated far from other department . 

4. Any disturbance in transport may affect production , ETC.  

Location and layout of stores department

The following factors  are be considered while determining the location of stores : 
1. It should be near to the receiving department .
2. It should be approachable by vehicles. 
3. It should be easily accessible to all departments , particularly to the production department . 
4. It should have sufficient space to hold the purchased inventory . 
5. It should be located considering the nature of the materials purchased . 
6. It should be located at a safe place .
7. Store must be equipped with sufficient bins and racks of appropriate shapes sizes. 
8. All bins should be serially numbered , one bin for one item . 
9. Special attention must be paid for liquid and chemical items protecting their loss from leakage, evaporation or atmospheric conditions . ETC. 

store - krrper's duties and responsibilities

The person who is in charge of the stores and who is entrusted with the responsibilities of stores control is called storekeeper . 
A storekeeper has to perform the following function : 
1. receive materials for storage , 
2. record the materials received , 
3. classify and codify the item received,
4. protect and preserve of items received in store , 5. supply of materials on demand .

duties and responsibilities of storekeeper : 
A. To receive the materials correctly, 
B. to enter the items receive in the bin card regularly in the chronological order ,
C. To keep the item in their allotted bin or bins ,
D. To prevent of loss of materials by theft , deterioration , evaporation , leakage , etc, 
E.To prevent the entry of unauthorized person into the stores , ETC.

objectives of store keeping

The follow3ing are the objectives of store keeping :

1. To collect necessary materials in a systematic way and by preventing undesirable purchase . to achieve those objective store levels minimum , maximum and reordering are to be determined . 
2. To help the regular function of the department i.e. supervision and management of flows of materials . 
3. To keep the materials in their appropriate location with proper codification and identification . 
4. To arrange forth proper issuing procedure .
5. To maintain the record of materials movement .
6. To inform the concerned department regularly about the stock position . 
7. To prevent loss of the stock by damage , pilferage , moisture , temperature , evaporation , carelessness , deterioration or misappropriation .
8. To minimize the storing cost .    

interduction to store keeping

materials received in the store should not be kept at whatever place . Therefore , agonized storing is one basic requirement of materials control that prevent losses from misappropriation, damage ,theft, evaporation , deterioration , leakage or obsolescence of store item , Whatever controlling effort put up by the organization will be loss effective if the item purchase are not kept systematically within the stores . experience shows that in many industrial organization they exercise a stiff control over cash but pay loss or no attention to materials control . It is surprising that they do forget the materials purchase by paying cash. materials can be converted into cash after they have been process into the finish production . So the materials in the store should be considered equivalent to cash . a well equipped store department is necessary to exercise control over materials where functions like collection , arrangement , prevention , distribution and recording of materials movement are carried out .           

Methods of costing

The concept and rules related to determining the cost of a product or service is called costing . There are diffirent method of costing . The process of working is diffiers from business to business . Likewise ,the method of costing are diffirent . For example , the production process foe catton textile and biscuits is different . should be adopted in consideration of the nature of the product . The following paragraph describe the general method of costing :

1. job order costing 
2. process costing 
3. service costing / operating costing 
4. unit costing  method
5.batch costing 
6. multiple costing method etc.