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Factory Over Head Cost:


                Managerial Accountant uses the Factory Over Head Cost to complete their productions and improves their product quality and efficiency. The FOH actually means the costs which are not directly related to the production or manufacturing activity but that cost we need to complete the product and make it more efficient or effective in quality to use. There are three different portions of the Factory Overhead Costs. These portions are Material Overhead, Labor Overhead, and Utility Overheads. These Material and Labor overhead costs are indirect and not directly involved in the production. The material that indirectly supports the production is known as material overhead, the labor supports which indirectly support the complete activity to improve the time efficiency is known as labor overhead and the utilities like insurance, rent, depreciations and many more expenses like it are known as factory overhead costs.


The Formula normally used for Factory Overhead Cost is as follows:



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