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Chaptter 7
1.2 Productionn overheadd
The prooduction fuunction is uusually diviided into aa number of departmeents or cosst
centress. Some off these cosst centres aare directlyy involved wwith the prroduction
processs. These aare called pproductionn cost cenntres.
Other ccost centrees which arre part of thhe producttion departtment are nnot directlyy
involveed with the productionn process bbut providee support sservices foor the produuction
cost ceentres. Theese are called servicce cost cenntres.
Fixed prroductionn overheead
Prroduction Producttion Servvice
cosst centre11 cost centtre 2 cost ceentre 1
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