Final answer:
Manufacturing Overhead includes indirect manufacturing costs and does not have subsidiary accounts for individual units of product, as such expenses are allocated to products based on labor or machine hours.
Step-by-step explanation:
The question relates to the accounting practice of tracking expenses in the production process. Manufacturing Overhead refers to all costs of manufacturing beyond direct material and direct labor. It typically includes indirect costs such as factory rent, utilities, and equipment maintenance. These costs are not traced to a single product, hence they do not have subsidiary accounts for individual items or units produced.A subsidiary account is a detailed ledger that shows the individual transactions and totals for a specific component of the main account. For instance, in Accounts Receivable, you might have subsidiary accounts for each customer.
However, manufacturing overhead costs are allocated to products on some reasonable basis, such as labor hours or machine hours and not tracked at the unit level. Therefore, there wouldn't be a subsidiary account for specific overhead items like electricity or depreciation, as they pertain to the overall operation and maintenance of the facility, not to individual units.Manufacturing Overhead is a term used in cost accounting that encompasses all the indirect costs incurred in the manufacturing process, such as factory rent, utilities, and maintenance expenses.Because it is a collective term, Manufacturing Overhead would not have a subsidiary account for each specific cost. Instead, it is typically allocated or applied to the products based on a predetermined overhead rate or another allocation method.In this way, the costs under Manufacturing Overhead are collectively accounted for, rather than having separate subsidiary accounts for each cost item.