Factory overhead is charged to expense as it is incurred because it is a period cost.

Name: Factory overhead is charged to expense as it is incurred because it is a period cost.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Factory overhead is not a period cost, but rather a product cost that includes indirect materials, indirect labor, and other manufacturing expenses. It is allocated to the cost of goods manufactured and shipped out during a period, and therefore, is not charged to expense as it is incurred.

Factory Overhead Is Charged to Expense as It Is Incurred