ECONOMICS

Detailed explanation-1: -Option A: Budgeted manufacturing overhead costs include fixed items such as the depreciation of the manufacturing machines because the assets are being used in the factory or in the production process. Thus, it is directly related to the product.

Detailed explanation-2: -Budgeted manufacturing overhead refers to planned or scheduled manufacturing overhead costs. These expenses include planned labor hours, estimated depreciation of equipment and other fixed manufacturing costs.

Detailed explanation-3: -Manufacturing overhead refers to all those costs that are NOT part of direct labor or materials. Therefore, manufacturing overhead costs are indirect and include charges such as: Factory rent and utilities.

Detailed explanation-4: -In manufacturing companies, manufacturing overhead includes all manufacturing costs except those accounted for as direct materials and direct labor. Manufacturing overhead costs are manufacturing costs that must be incurred but that cannot or will not be traced directly to specific units produced.

Detailed explanation-5: -Overhead Budget is prepared to forecast and present all the expected costs concerning manufacturing the goods that the company expects to incur in the next year. It excludes the direct material and the direct labor cost, and the information, which becomes part of the cost of the goods sold in the master budget.