Commercial Applications
A typical factory overhead cost is ……………
- Audit
- Compensation of plant manager
- Design distribution
- Internal
Answer
Compensation of plant manager
Reason — Factory (manufacturing) overheads include indirect materials, indirect labour and indirect expenses incurred in connection with the production of goods. The salary/compensation of a plant manager is indirect labour incurred in running the factory, hence it is a typical factory overhead. Audit fees are office and administrative overhead, design distribution is a selling overhead, and "internal" is not a recognised overhead category.
Related Questions
Total variable cost per unit increases ……………
- When production grows
- When demand decreases
- Change in government rules
- Change in availability of raw material
'The product has some value which can be measured in terms of money' it is called ……………
- Historical value
- Exchange value
- Zero value
- Positive value
The cost of raw materials used in production is considered an indirect cost.
- True
- False
In element-wise classification of overheads, which one of the following is not included in?
- Fixed overheads
- Indirect labour
- Indirect materials
- Indirect expenditure