Which of the Following Is Part of Factory Overhead Cost

question 187

Multiple Choice

Which of the following is part of factory overhead cost?

• A) sales commissions
• B) depreciation of factory equipment and machines
• C) depreciation of salesperson's vehicle
• D) direct materials used

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Definitions:

Volume Variance

The difference between planned production volumes and actual production volumes, and its effect on budgeted costs.

Variable Overhead

Costs that fluctuate with changes in production level or activity, such as utilities or materials, within the manufacturing overhead category.

Rate Variance

It is the difference between the actual rate paid for an item or service and the expected (standard or budgeted) rate, often used in budgeting and cost management.

Predetermined Overhead Rate

A rate calculated before a period begins, used to assign overhead costs to products or job orders based on a certain activity, such as machine hours or labor hours.