Manufacturing support costs

Manufacturing support costs are the overhead costs associated with the production process. These costs are relatively fixed, with no direct relationship to the volume of units produced. Examples of support costs are:

  • Factory manager compensation
  • Quality assurance compensation
  • Materials handling compensation
  • Factory rent
  • Production-related insurance
  • Equipment depreciation
  • Production-related utilities
  • Supplies

Manufacturing support costs are allocated to the number of units produced, and then charged to expense as these units are sold. This can mean that some support costs are initially capitalized into inventory, and then charged to expense at a later date.

Similar Terms

Manufacturing support costs are also known as factory overhead and factory burden.