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

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

Correct Answer:

Option C – 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