Non Manufacturing Overhead Costs

Non manufacturing overheads cost or non-manufacturing cost is the costs that are associated with the non manufacturing expenses of the business. These expenses may include selling and administrative expense, interest expenses and other kind of expenses that are not the part of the manufacturing process. The non manufacturing costs are not included in the product cost or production cost. Non manufacturing expenses or costs are mentioned on the income statement of the business for that accounting period under the category of expenses. These expenses or costs are not allocated to the product on the basis of production overhead costs as these are not included in the amount that is shown as the part of the inventory on the balance sheet. These expenses are also not included in the costs of goods sold that are recorded on the income statement of the business.

Non manufacturing costs may include salaries of the employees and the fringe benefits of selling and administrative purpose. This may include salaries of all the employees that are not the part of the manufacturing process such as president, vice president, managers and other such employees. In addition to that non manufacturing costs also include rent, property tax and other utility bills paid by the business. Another example of non manufacturing costs can be the insurance premium that is paid for the areas other than the factory. Other examples of non-manufacturing costs are the interest on the business loans, marketing and advertising expense, depreciation and maintenance expense of an asset that is used outside the factory and office supplies.

Other Related Accounting Articles:

Recommended Books !


Download E accounting book in MS-word format for just 20 $ - Click here to Download

Latest Comments
  1. Ignatius March 14, 2017

Leave a Reply

Your email address will not be published. Required fields are marked *