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Question
Which of the following is overhead cost?
Options
Amount spent on raw material.
Salary of the finishing cost centre supervisor.
Wages paid to labour.
None of these.
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Solution
Salary of the finishing cost centre supervisor.
Explanation:
This is an overhead (indirect) cost because the supervisor’s salary cannot be directly traced to a specific product or unit. Raw materials and production wages are direct costs charged to the product.
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