Final answer:
The statement is true; manufacturing overhead includes all manufacturing costs except direct materials and labor, encompassing fixed and variable costs not directly tied to production.
Step-by-step explanation:
The statement that the sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead is True. Total costs in manufacturing consist of fixed costs and variable costs. Fixed costs, such as rent and salaries, do not change with the level of production. Variable costs, like wages for hourly employees, vary with production levels.
The fixed costs for a business like 'The Clip Joint' barber shop, for instance, are $160 per day, irrespective of how many haircuts are given. Variable costs depend on the number of barbers hired; each barber's wage adds to the variable cost.
Manufacturing overhead includes a variety of expenses such as utilities, depreciation, and maintenance that are not direct materials or direct labor but are still necessary for the production process. Understanding the distinction between types of costs is vital for firms as they analyze total expenses and assess their overall financial performance.