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Depreciation of the corporate office building is treated in the cost sheet as
Aa direct expense
Ban administrative overhead
Ca works overhead
Da distribution overhead
Answer & Solution
Correct answer: B. an administrative overhead
1. Administrative overhead is the cost of general administration of the entity.
2. It expressly includes depreciation and maintenance of building and furniture of corporate or general management.
3. So the corporate office building's depreciation is administrative, not works.
4. Works overhead would cover the factory building instead.
_Source: ICAI Cost and Management Accounting Ch6 'Cost Sheet', section 6.3.4(i)_
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