Introduction to Factory Overheads
These are costs that have been apt in connection with production of a manufactured commodity earlier than it has appeared of the workshop. They are also known as Factory On cost, Burden, Factory Loading etc. They contain:
(a) Indirect Material
(i) Cost of consumable stores like cotton waste, lubricating oil, brushes for sweeping etc.
(ii) Cost of stationery employed in the works.
(b) Indirect Labour
(i) Salary paid to the Works Manager and other main officers of the factory involving fees payable to the directors devoting attention to factory problems.
(ii) Pay for holiday and sick leave.
(iii) Salaries of store-keepers.
(iv) Contribution to some social security schemes like to the Employee's State Insurance Corporation.
(v) Contribution to provident fund of factory employees.
(vi) Salary paid to the supervisory and clerical staff of the factory.
(c) Indirect Expenses.
(i) Rent of factory buildings and land.
(ii) Insurance of factory plant and machinery, buildings, and stocks of raw materials.
(iii) Municipal taxes regarding factory buildings.
(iv) Work's welfare and canteen expenses.
(v) Experimental and research work that are designing for production and drawing office expenses.
(vi) Fuel and Power.
(vii) Stores expenses involving salaries of storekeepers and other expenses acquired in handling of stores.
(viii) Cost of training new employees.
(ix) Lighting and heating charges of the factory.
(x) Work's telephone expenses.
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