Asked by Iliana Napoles on May 26, 2024
Verified
Which of the following costs would not be classified as factory overhead?
A) Property taxes on maintenance machinery.
B) Insurance on factory building.
C) Wages of the factory janitor.
D) Rubber for the soles of shoes produced.
E) Small tools used in production.
Factory Overhead
Costs related to the operation of a manufacturing plant which cannot be directly associated with specific units of production, such as utilities, maintenance, and management salaries.
Property Taxes
Property Taxes are levies imposed by local governments on real estate based on the property's value, used to fund public services and infrastructure.
Insurance
A financial product that offers protection against potential future losses or damages in exchange for a premium.
- Identify costs not included in factory overhead.
Verified Answer
HP
Hriday PatelJun 01, 2024
Final Answer :
D
Explanation :
Rubber for the soles of shoes produced is a direct material cost, not a factory overhead cost. Factory overhead costs are indirect costs that are not directly traceable to a specific product, such as property taxes, insurance, wages of maintenance staff, and small tools used in production.
Learning Objectives
- Identify costs not included in factory overhead.