Which of the following is an example of a factory overhead cost?
A) Repair and maintenance cost on the administrative building
B) Factory heating and lighting cost
C) Insurance premiums on salespersons' automobiles
D) President's salary

Question

Quizplus · Accepted Answer

Factory heating and lighting cost is an example of a factory overhead cost, as it is a cost incurred in the production process, but not directly related to the manufacture of a specific product.

All the other options are not factory overhead costs as they are not directly related to the manufacturing process. Repair and maintenance cost on the administrative building (A) is an example of administrative overhead cost. Insurance premiums on salespersons' automobiles (C) is an example of selling and marketing expense. President's salary (D) is an example of a general and administrative expense.

Which of the Following Is an Example of a Factory