Which of the following is NOT considered a factory overhead cost?

• A. Depreciation on factory equipment
• B. Factory utilities expense
• C. Direct materials used in production
• D. Factory supervisor's salary

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of factory overhead costs. Factory overhead costs are indirect costs incurred during the manufacturing process that cannot be directly traced to a specific product. Examples include depreciation on factory equipment, factory utilities, and factory supervisor's salary.
2. Step 2: Differentiate between direct costs and indirect costs. Direct costs, such as direct materials and direct labor, are directly traceable to the production of specific goods. Indirect costs, such as factory overhead, are shared across multiple products and cannot be directly traced.
3. Step 3: Analyze each option provided in the question. Depreciation on factory equipment, factory utilities expense, and factory supervisor's salary are all indirect costs and therefore considered factory overhead. Direct materials used in production, however, are direct costs and not part of factory overhead.
4. Step 4: Identify the correct answer based on the analysis. Since direct materials used in production are direct costs, they are NOT considered factory overhead costs.
5. Step 5: Conclude that the correct answer is 'Direct materials used in production,' as it does not fall under the category of factory overhead costs.