One of the components of factory overhead is............

A.

Raw materials consumed

B.

Manufacturing wages

C.

Carriage inwards

D.

Depreciation of plant and machinery

Correct answer is D

Costs that support production but are not direct materials or direct labor are considered overhead. It includes;

  • Depreciation of equipment and factory facilities.
  • Rent, property taxes, insurance, and utilities.
  • Employment costs for supervisors, maintenance and quality control staff, and any other on-site employees who aren't physically making signs.