Factory overhead includes
A) factory rent and direct labor
B) direct materials and direct labor
C) indirect materials and direct materials
D) indirect labor and indirect materials

Question

Quizplus · Accepted Answer

Factory overhead includes indirect labor and indirect materials, which are costs that cannot be directly traced to a specific product or department. Examples include maintenance and repairs, utilities, and factory supplies. Choices A and B include direct labor and direct materials, which are considered part of the cost of goods sold. Choice C includes indirect and direct materials, but not indirect labor.

Factory Overhead Includes