Commercial Applications
An example of a production overhead would be ……………
- Material
- Rent
- Labour cost
- Supervisory cost
Cost
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Answer
Supervisory cost
Reason — Production overhead consists of indirect materials, indirect labour and indirect expenses related to the production process. Supervisory cost (salary of foremen, supervisors) is indirect labour and forms part of factory/production overhead. Material and labour cost (when direct) are part of prime cost, not overhead. Plain "rent" is generic — without specifying it as factory rent it cannot be classified as production overhead.
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Related Questions
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(3) They only apply to service industries.
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