Overhead Costs

Direct manufacturing overhead cost

Direct manufacturing overhead costs constitute all manufacturing costs excluding direct labour, direct material, administration overheads and marketing costs.  Direct manufacturing overhead costs are thus those costs that constitute an essential part of the manufacturing costs, but cannot be identified in a specific product. 

There are various kinds or types of direct manufacturing overhead costs that can differ from business to business.  Yet there are general direct manufacturing overhead costs that are found in most businesses.  Indirect material and indirect labour costs have already been mentioned. 

Other general factory overhead costs include:

  • Rent of factory premises
  • Depreciation or leases on machinery and equipment
  • Water and electricity
  • Maintenance costs of buildings, machinery and equipment
  • Insurance covering buildings, machinery and equipment
  • Loose tools

Cleaning materials, lubrication, fuel etc

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