Factory over head cost


Apart from direct cost which can easily be calculated there are many indirect cost involved in
factory operations which has to be taken into accounts  for  income statement of a
manufacturing unit .

These are indirect  cost  such as


Labour related factory overhead

These includes all cost linked to indirect labour/employees  which helps in factory operations
such as manager salaries , sales men salaries , canteen expenses  etc



Material related  factory  overhead

Indirect cost  in  Admin material like office equipments , stationery  , office depreciation on
furnitures and machine ,

Production have electricity and fuel as  factory overhead expense


Machine related overhead cost

These includes maintenance cost , insurance on service contracts for maintenance of repair


Space related  overhead cost

Rent , lease cost , insurance of building  lighting and maintenance cost of building


Service related  factory overhead
Utility bills  and service cost  related to audits, fire safety , legal expenses  etc .


Administration  Overhead for  factory

Cost incurred in  running , planning and operations   are  termed admin cost such as cost of  
managerial salary , office rents , pest control , travel,
telecom expense  and  conveyance ,  etc







More on  Manufacturing Costing


Product Costing
Material Cost
Labor Cost
Factory  Overhead Cost
Factory  overhead cost
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