In general, costs incurred in the factory those do not qualify as either direct material or direct labor are called:
A) manufacturing costs.
B) manufacturing overhead.
C) nonmanufacturing costs.
D) selling and administrative costs.

Question

Quizplus · Accepted Answer

Manufacturing overhead includes all indirect costs incurred in the factory, such as rent, utilities, maintenance, insurance, and depreciation of equipment. These costs cannot be traced directly to specific products or units of production, but are necessary for the manufacturing process to take place. Manufacturing overhead is also known as indirect manufacturing costs.

In General, Costs Incurred in the Factory Those Do Not