Question

Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table?A) the amount paid to the individual who stains the table.B) the commission paid to the salesperson that sold the table.C) the cost of glue used in the table.D) the cost of the wood used in the table.

Answer 1

Answer: Option C                        

Explanation: Manufacturing overhead refers to the that portion of the cost which cannot be allocated to the units produced in a reasonable manner. These costs are indirectly related to the product manufactured. For example = depreciation, rent etc.

Thus, the cost of glue cannot be allocated to each individual unit produced. As the worker might put a more in one unit and a little less in the other.

Thus, from the above we can conclude that the correct option is C.