ECONOMICS

Detailed explanation-1: -The “factory cost” term is sometimes applied only to manufacturing overhead costs, without consideration to the costs of direct materials or direct labor. If so, the “factory cost” term is essentially the same as factory overhead.

Detailed explanation-2: -Factory cost is the summation of prime cost and factory overheads that includes indirect material, indirect labour and indirect expenses of factory. It is also know as work cost, manufacturing cost or production cost.

Detailed explanation-3: -Administrative Overheads is the cost of all activities relating to general management and administration of an organisation. It is represented by cost of shared services, infrastructure cost and general management cost.

Detailed explanation-4: -Manufacturing overhead is also known as factory overhead, production overhead, and factory burden.