Accounting

Which are General Factory expenses and Janitor Labor expenses?

General Factory expenses: Certain expenses other than those discussed above come under the category General Factory expenses because they cannot be identified directly with any specific producing or service department.

Therefore, a separate general plant cost center or department is established to accumulate and control such expenses. Such a department is usually the direct responsibility of the plant superintendent. Salaries of management personnel directly concerned with production are charged to this department if they cannot be charged to specific departments except by arbitrary allocations. Janitor labor and supplies may be charged to general plant unless charged to maintenance or to a department called “building occupancy.”

Let us have a look at, which costs are considered product costs and which are considered period costs because all expenses incurred outside the manufacturing process are not considered factory overhead (FOH).

Unless separate service departments for plant protection and yard operation are established, these costs are also charged to general plant expense. Real estate and personal property taxes, liability, fire, and use and occupancy insurance might be charged to general plant when they cannot be traced directly to a department.

Otherwise, to control such expenses , an expense tracker may be setup.

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