Correct Answer: Option D

Explanation

Factory overhead is the total cost involved in operating all production facilities of a manufacturing business that cannot be traced directly to a product. It has to do with indirect labor and cost.

Examples are;

• Electricity or gas used in a factory.
• Other utilities, such as water and trash service.
• Unforeseen repairs or maintenance.
• Employees who perform repairs or maintenance.
• Supervisors or managers in the factory salaries.
• Depreciation on a building's value.
• Rent and property taxes.
• Equipment depreciation.

Furniture and fixtures are office expenses and are not involved in the production phase.

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