Question

Salary paid to factory manager is an item of:

• A. Prime cost
• B. Factory overhead
• C. Selling overhead
• D. Office overhead

Answer 1

Answer: (B)

Factory overhead

Factory overheads are also known as manufacturing overheads. Factory overheads are those expenses which are incurred during the manufacturing process. It does not includes the cost of direct labor and material.

Salary paid to factory manager is an item of factory overheads.