Which of the following is not included in factory overhead?

Question

Which of the following is not included in factory overhead?

BlackTom AI · Accepted Answer

When considering factory overhead, it's essential to distinguish between costs that are tied to the manufacturing process and those that are not. 
Option 1: Indirect labor costs. These are wages of workers not directly traceable to a specific product but necessary for production (e.g., maintenance staff, supervisors). They are classic components of factory overhead, so this option is included in overhead. 
Option 2: Indirect materials costs. These are materials used in production but not directly traceable to a single unit (e.g., lubricants, cleaning supplies). They are also part of factory overhead, so this option is included. 
Option 3: Advertising costs. Advertising is a selling expense and not linked to the manufacturing process. It is treated as a period cost and not allocated as factory overhead, so this option is not included in overhead. 
Option 4: Factory rent. Rent for the factory building is a fixed cost related to manufacturing space and routinely allocated as overhead to products, so this option is included. 
Option 5: Depreciation of manufacturing equipment. The depreciation of machinery and equipment used in production is a manufacturing overhead cost, thus included. 
In summary, among the listed items, advertising costs are the ones not included in factory overhead because they pertain to selling activities rather than production activities.

accy_201_120258_251205 Review Quiz #6

Which of the following is not included in factory overhead?

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