ECONOMICS

Detailed explanation-1: -Manufacturing overhead refers to the indirect costs of manufacturing something. It includes the materials used in making a product, storage and handling, repairs and maintenance, plant supervision, and insurance. Manufacturing overhead also comprises depreciation on capital equipment used in production.

Detailed explanation-2: -What are Indirect Manufacturing Costs? Indirect manufacturing costs are production costs that cannot be directly associated with a produced unit. Examples of these costs are supplies, depreciation, utilities, production supervisory wages, and machine maintenance.

Detailed explanation-3: -Manufacturing overhead costs are called indirect costs because it’s hard to trace them to each product. These costs are applied to the final product based on a pre-determined overhead absorption rate.

Detailed explanation-4: -Factory overheads are the aggregate of indirect materials, labor, and other costs that cannot be identified conveniently with the articles produced or services rendered. The benefits arising from these costs cannot be associated with a specific cost unit.