Classified as a production cost, factory overhead are costs other than direct material and labor cost. Therefore, the factory overhead is the cost which cannot be directly attributable to production cost.
The following are properly classified by Fort Motor company, a maker of heavy automobiles and trucks as part of their factory overhead.
The stamping plant at Buffalo, New York Plant manager’s salary, which manufactures auto and truck subassemblies – YES
Flat Rock, Michigan, assembly plant’s depreciation – YES
Shareholder’s paid dividends - NO
Maintenance of the assembly line at the Louisville, Kentucky, assembly plant which used a machine lubricant - YES