Final answer:
Raw materials are not classified as factory overhead. They are direct inputs into the production process and are considered direct costs, unlike indirect costs like indirect materials and depreciation on factory equipment which are included in factory overhead.
Step-by-step explanation:
The item that is not classified as factory overhead is raw materials. Factory overhead, also known as manufacturing overhead or factory burden, refers to all the indirect costs associated with manufacturing a product that are not directly traceable to that product. Examples of factory overhead include costs like electricity used to run factory equipment, salaries of factory maintenance personnel, and depreciation on factory equipment.
Let's consider what each option represents:
- Direct labor refers to the wages of employees who are directly involved in the manufacturing of a product. This is not overhead but a direct cost.
- Indirect materials are materials used in the production process but not directly included in the final product, such as lubricants for machinery. These are a part of factory overhead.
- Depreciation on factory equipment is an indirect cost associated with the production process and is also part of factory overhead.
- Raw materials are the direct inputs into the production of goods, such as the flour, yeast, and toppings for making pizza. These materials are not factory overhead but rather direct costs.
Therefore, raw materials are not classified as factory overhead and is the correct answer to the question.