Overheads are the expenses incurred by the company to run the company smoothly. Administrative overhead is the expenses borne by the admin department. This expense is essential to run the business. With manuals as administrative overheads homework answers, you can get a perfect assistance by which you can get clarity in regards to this subject.
Hence, as students of this subject, or even in professional domain, these manuals are just what you need.
Examples of administrative overheads
- The cost incurred to formulate a policy and make employee follow that practice. Like if employee want to make sure that employee work for 8 works, then will either hire a supervisor or biometric attendance system will be purchased and installed in the factory. So here supervisory salary and money spend to purchase biometric is expense.
- Cost bear by the company to run the factory smoothly like electricity bill of the building, fuel required to run the equipment. Etc
- Depreciation value of the building, equipment etc
- Salary of the admin department
- Amount paid to carry the raw material to the factory and carry finished good to the final customer.
How does accountant deal with the administrative expense?
- Either they put the expense amount in Profit and loss account, as it is overhead expense and putting it in one department is not good.
- Either divide the amount on production or selling and distribution department. Division is done on the basis of money spent for raw material or finished goods.
- Treat the administrative cost as a section in balance sheet and mention it as a separate column.
Administrative overheads homework answers can guide an individual with a best possible way to capture each and every administrative overhead in the balance sheet. This will help the company to look for hidden expenses and try to eradicate and make minimum expenses.
Why does strategic team want to reduce the administrative expense?
Reducing administrative cost will help the company to increase the cash flow toward the project handling. Company can handle bigger projects, and it will bring further prosperity in the company. Also, profit will increase manifold.
Administrative overheads homework answers provide special class to an accountant to improve his/her skills. This will help the accountant to search each and every hidden administrative expense. These hidden expenses are small in look, but when they are adde4d together, it sums up to a huge amount.
For example, the subscription was taken by the company, with time everyone will forget about it, but it will cost to the company each and every month, and when it is summed at the end of the year, it will reach to a huge amount.
Administrative overheads homework answers will help the employee to locate this kind of expense and thus help in increasing the profit of the company by reducing the expense. It will train the employee regarding handling administrative expense in the balance sheet.
How to reduce the administrative overhead?
Administrative overheads homework answers will provide excellent tips to the strategic team of the company to reduce the administrative expense.
Check them out here:
- Select cloud computing technology –
If you are service based company; for sure you require laptop and computers. Instead of using many laptop and computer to store the data, use cloud computing technique. It will help to keep the data safe, and thus you can avoid the data security expense and also the expense to purchase so many laptops, and computers can be saved.
- Use internet-based communication –
Video communication is more effective than telephonic communication according to a survey. Also, it saves the telephone bill.
- Stop using paper –
Paper-based file maintenance is old technology. Use cloud computing to secure each and every employee detail, and it will also help you to keep your project data safe
- Layout of the office building –
Thinking about the requirement of the premises you required.If it is more than you needed either move to small premises or try to utilize the remaining space as much as possible. Administrative overheads homework answers will give you best possible layout structure according to your requirement.
- Work from home –
There are many people who prefer to work from home specially the women with small baby. They need to be in the house and take care of the baby, but they also want to work. Work from home will help the company in two ways; you will have to pay less and goodwill of the company will increase.
Administrative overheads homework answers will provide you with the way to tackle with employee who wants to work from home. This is a new concept and requires a lot of experience to handle it.
- Traveling cost –
One can easily reduce the traveling cost by arranging video conference between client and company employee. You can opt for digital signature as valid in place of parties signing the paper. Administrative overheads homework answers will also provide more options to reduce the traveling cost.
- Sharing –
This is a new concept. The company nowadays are willing to share their branding, production space, etc. This provides awin-win situation to both the companies as they can use each other channel, their network will grow and cost incurred will be half.
- Rent rather than buy –
This is a common thing done by many companies nowadays. Because if you purchase anything, depreciation expense gets attached to the equipment.One can avoid depreciation if the company is renting the equipment rather than purchasing it.
- Rent –
Rent the equipment which you are not using right now. This will give you extra profit.
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