Explanation: Manufacturing overhead is a term used to describe the indirect expenses made during the manufacturing process of a given product,it is also known as Factory Burden or Factory overhead.
Manufacturing overhead
includes ELECTRICITY USED TO RUN THE FACTORY EQUIPMENT, DEPRECIATION OF EQUIPMENT, BUILDING, FACTORY SUPPLIES AND FACTORY PERSONNEL. According to GAAP principles the manufacturing overhead must be attached to product produced in order to record the inventory and cost of goods sold.
