UNIT II

Task 1. Remember the meaning of these words and word-combinations:

overheads – накладні витрати

recovery – відшкодування

to warrant – гарантувати, ручатися

director raw-material – основні виробничі матеріали
(або сировина)

to merit – заслуговувати на щось

to apply – застосовувати

to run a business – вести справи

remuneration – винагорода, оплата

to split up – розділятися, дробитися

two-fold process – подвійний процес

cost accounting – виробнича бухгалтерія, виробничий облік

management accounting – керівний (оперативний) облік

screw – гвинт,

direct labour – основна праця

to be of the mature – походити від чогось, набувати (форму, вигляд)

to assume – припускати

productivity bonus – виробнича премія

to top up with – завершувати чимось

raising finance – збільшене фінансування.

Score: 19

Task 2. Read and translate the text.

Text

Overheads and their recovery

The costs of a business are of two types – direct and indirect. The direct costs vary directly with production. If one additional unit of production is made, there will be a measurable increase in direct cost. When one unit less is made, there will be similar measurable decrease in direct cost. Direct or raw-material is normally the largest component of direct cost. It includes all items of material that are of sufficient size to warrant the effort of charging directly to the job. Small items, such as glue, paint and small quantities of nails, screws and rivets, do not merit the clerical effort involved in charging directly to the job, and would be recovered as an overhead.

Direct wages will vary directly with production where remuneration is based upon piece work only. This means that a specific amount is paid when a production operation is successfully finished. If it is not finished, no payment is made. It is assumed that direct labour is of this nature. Many organizations remunerate labour on the basis of a large basic wage, topped up with a productivity bonus. The basic element is paid regardless of the level of production. In such cases wages will not vary directly with production, and fall into the category of an indirect cost or overhead.

Overhead is a general form applied to all the costs involved in running a business, other than direct costs. It covers the costs of running the works organization; product research and development; the administration of the business; selling and distributing the product; and the cost of raising finance. Overheads are diverse, covering the whole of the business organization. The management accountant has the problem of allocating these costs to the individual product lines being manufactured.

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