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State overhead expenses
It is to be noted that the term overheard has a wider meaning than the term indirect expanses. Overheads include the cost of the indirect material and indirect labour besides the indirect expanses. Indirect expanses may be classified under the following three categories.
Manufacturing (works, factory or production): such indirect expenses which are incurred in the factory and concerned with the running of the factory and concerned with the plant are known as manufacturing expanses. Expenses relating to production management and administration are included therein. Factory overheads include:
a. Indirect material used in the factory such as lubricants oil, consumable strobes etc.
b. Indirect labours such as gate keeper salary, time keeping salary, work manager's salary etc.
c. Indirect expanses such as factory rent, factory insurance, factory lighting etc.
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