Which of the following expenses relate to the profit and loss account of a manufacturing firm?

A. Administrative overhead
B. Direct labour
C. Direct materials
D. Work-in-progress

Correct Answer:

Option A – Administrative overhead

Explanation

Administrative overhead is those costs not involved in the development or production of goods or services. This is essentially all overhead that is not included in manufacturing overhead. Examples of administrative overhead costs are the costs of: Front office and sales salaries, wages, and commissions. Office supplies.