Manufacturing overhead referred to as factory overhead, Accounting, Basic Statistics

Manufacturing overhead referred to as factory overhead, Accounting, Basic Statistics

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Manufacturing overhead referred to as factory burden, factory overhead, and manufacturing support costs refers to indirect factory related costs which are incurred when a product is manufactured. Along with these costs such as direct material & direct labor, the cost of manufacturing overhead must be assigned to each unit produced so that Inventory & Cost of Goods Sold are valued & reported according to generally accepted accounting principles (GAAP).Manufacturing overhead involves such things as the electricity used to depreciation on the factory equipment and building; operate the factory equipment, factory supplies & factory personnel. How these costs are assigned or operated to products has an impact on the measurement of an individual product''s profitability

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