Electricity purchased to operate factory machinery would be included as part of the cost of products manufactured under the absorption costing concept.

Electricity

The cost associated with the consumption of electrical power used in business operations or manufacturing processes.

Absorption Costing

An accounting method where all manufacturing costs, both fixed and variable, are allocated to produced units, making it different from variable or direct costing methods.

Factory Machinery

The collective term for the mechanical, electrical, and computer-based equipment used in a manufacturing or production facility to create products.