Factory over head cost
Apart from direct cost which can easily be calculated there are many indirect cost involved in
factory operations which has to be taken into accounts for income statement of a
manufacturing unit .
These are indirect cost such as
Labour related factory overhead
These includes all cost linked to indirect labour/employees which helps in factory operations
such as manager salaries , sales men salaries , canteen expenses etc
Material related factory overhead
Indirect cost in Admin material like office equipments , stationery , office depreciation on
furnitures and machine ,
Production have electricity and fuel as factory overhead expense
Machine related overhead cost
These includes maintenance cost , insurance on service contracts for maintenance of repair
Space related overhead cost
Rent , lease cost , insurance of building lighting and maintenance cost of building
Service related factory overhead
Utility bills and service cost related to audits, fire safety , legal expenses etc .
Administration Overhead for factory
Cost incurred in running , planning and operations are termed admin cost such as cost of
managerial salary , office rents , pest control , travel or conveyance , etc
More on Manufacturing Costing
Product Costing
Material Cost
Labor Cost
Factory Overhead Cost
Factory overhead cost
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