ECONOMICS

Detailed explanation-1: -Manufacturing overhead is all indirect costs incurred during the production process. This overhead is applied to the units produced within a reporting period. Examples of costs that are included in the manufacturing overhead category are as follows: Depreciation on equipment used in the production process.

Detailed explanation-2: -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-3: -Examples of indirect costs may include: building rent, legal expenses, business insurance, advertising expenses, accounting and administrative salaries, office supplies, and certain utilities.

Detailed explanation-4: -Usually manufacturing overhead costs include depreciation of equipment, salary and wages paid to factory personnel and electricity used to operate the equipment.

Detailed explanation-5: -Manufacturing overhead is an indirect cost because it is a common cost which is incurred across all products or departments. Such costs cannot be traced conveniently and directly to specific units of product.