Which of the following is not part of factory overhead?
- factory salaries
- factory lighting and heating
- depreciation of plant and machinery
-
depreciation of furniture and fixtures
The correct answer is: D
Explanation
Factory overhead is the total cost involved in operating all production facilities of a manufacturing business that cannot be traced directly to a product. It has to do with indirect labor and cost.
Examples are;
- Electricity or gas used in a factory.
- Other utilities, such as water and trash service.
- Unforeseen repairs or maintenance.
- Employees who perform repairs or maintenance.
- Supervisors or managers in the factory salaries.
- Depreciation on a building's value.
- Rent and property taxes.
- Equipment depreciation.
Furniture and fixtures are office expenses and are not involved in the production phase.