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Question
An example of a production overhead would be ______.
Options
Material
Rent
Labour cost
Supervisory cost
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Solution
An example of a production overhead would be supervisory cost.
Explanation:
Supervisory cost is a production overhead because it is an indirect cost incurred in the manufacturing process. The salary of a factory supervisor cannot be directly traced to the production of a specific product, but is necessary for supervising and managing the production activities. Hence, it is classified as a production overhead.
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