Question

Budgeted manufacturing overhead costs include all types of factory expenses EXCEPT

A. fixed items such as depreciation of manufacturing machinery.
B. variable items such as plant supplies.
C. indirect labor such as the salary of the plant supervisor.
D. direct labor and direct materials.

Answer 1

Budgeted manufacturing overhead costs consist of various factory expenses. They include fixed and variable items but do not include direct labor and direct materials, as these are directly traceable to product production. Option D

Step-by-step explanation:

In accounting, specifically in cost accounting, budgeted manufacturing overhead costs encompass all kinds of expenses related to the production process except for direct labor and direct materials. These overhead costs typically include fixed items such as depreciation of manufacturing machinery, variable items like plant supplies, and indirect labor costs, including the salary of the plant supervisor.

However, direct labor, the cost associated with workers who produce the products, and direct materials, the raw materials used in the production process, are not included in overhead costs as they are directly traceable to the production of specific goods. Option D