Question

Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory? Multiple Choice The cost of the glue in a chair. The amount paid to the individual who stains a chair. The workman’s compensation insurance of the supervisor who oversees production. The factory utilities of the department in which production takes place.

Answer 1

Answer:

The amount paid to the individual who stains a chair.

Explanation:

Manufacturing overhead cost in this context are all indirect cost incurred during the process of producing furniture. cost of glue in a chair, the workman's compensation, insurance of the supervisor who oversees production, the factories utilities of the department in which production takes place are all indirect cost incurred in the production of furniture and are hence overhead cost. However, the amount paid to the individual who stains a chair is not part of overhead cost.

Answer 2

Manufacturing Overhead is the cost which is related to the production of finished goods.

This type of cost is incurred to convert raw material into the finished goods. These costs does not include selling or administrative expenses.

The correct answer for the given question is C. The amount paid to the individual who stains a chair should not be included in manufacturing overhead cost.

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