The amount of overheads charged to jobs during the year is likely to be different from the amounts actually incurred

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Overheads are indirect costs which cannot be easily traced to a specific job or product. These include rent, utilities, and other administrative expenses. Overheads are allocated to jobs based on certain predetermined criteria, such as machine hours or direct labour hours, but the actual amount incurred may differ from the allocated amount due to unforeseen circumstances, such as machine breakdowns or changes in production volumes. Therefore, the amount of overheads charged to jobs during the year is likely to be different from the amounts actually incurred.

The Amount of Overheads Charged to Jobs During the Year