FACTORY OVERHEADS
Overheads are indirect costs and can not be identified directly with specific cost units, jobs or processes etc. These include:
- Indirect material costs
- Indirect labour costs
- other indirect costs
Some examples of each are as follows:
Indirect Materials:
- Cotton waste
- Factory office supplies
- Fuel, oil, coal etc.
- Lubricants
- Perishable tools
- Repair and maintenance costs.
Indirect Labour:
- Cleanors, janitors, helpers etc.
- Factory Office Staff
- Foremen, supervisors.
- Idle time wages
- Overtime premiums
- Payroll contributions and taxes
- Paid leaves.
- Quality Inspectors
Other Indirect Expenses:
- Depreciation
- Electricity and gas bills
- Insurance
- Normal rework on defective production
- Normal Spoilage
- Property taxes
- Rent
- Service Department Expenses
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