Overhead Costs
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Manufacturing firms like Boeing convert raw materials into a product and then sells those products to other companies. Manufacturing costs include all costs incurred to make a product. Manufacturing costs are usually divided into three main categories: direct materials, direct labor, and manufacturing overhead. Direct materials at Boeing represent the aircraft engines used on a Boeing 777. Direct labor includes a portion of labor costs often referred to as touch labor, that is the cost of workers who actually touch the product during manufacturing. Manufacturing overhead costs consists of all manufacturing costs other than direct materials and direct labor. Such costs are not as readily traced to products, such as the rivets on a Boeing 777, janitors, and factory facility charges. Cost objects are either direct or indirect costs. Direct cos
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Approximate Word count = 586
Approximate Pages = 2 (250 words per page)
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