Factory overhead can be charged on the basis of ........

Costing - Phase (I & II) Overview of Cost and Management Accounting

Factory overhead can be charged on the basis of _______.

material cost

labour cost

prime cost

direct expenses

Prime cost= Direct materials cost + Direct labor cost,

Direct expenses involved in the production process.

Therefore, factory overhead can be allocated based on the prime cost, which represents the direct costs associated with production.

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how can be material cost is factory overhead, as material cost is a part of direct costing?

Overhead is charged on cost center or department. It is not necessary that only material cost is charged upon.