One of the components of factory overhead is............
Answer Details
Factory overhead is the total cost incurred in the production of goods, other than the direct cost of labor and materials. It includes various indirect costs such as rent, utilities, maintenance, and other expenses associated with operating a factory.
One of the components of factory overhead is depreciation of plant and machinery. This refers to the decrease in value of the factory's equipment and assets over time due to wear and tear, obsolescence, and other factors. Depreciation is considered an indirect cost because it does not directly contribute to the production of goods, but is necessary to maintain the factory's productive capacity.
In summary, depreciation of plant and machinery is an important component of factory overhead because it represents the ongoing cost of maintaining and replacing the factory's assets, which are essential for producing goods.