Support costs definition
/Support costs are manufacturing expenditures that cannot be traced directly to individual products or production activities but are necessary to keep the factory operating. Examples include maintenance, supervision, utilities, insurance, depreciation, quality control, and production scheduling. Because these costs generally do not change in direct proportion to unit volume, they are classified as factory overhead and allocated to products using an appropriate selected cost driver.
Examples of Support Costs
Examples of support costs are as follows:
Depreciation of equipment. This is the gradual expense of production machinery and equipment wear and tear over time.
Quality assurance department. This department monitors product quality levels through the production process.
Maintenance department. This department provides both scheduled and emergency maintenance service to the equipment in the manufacturing area.
Procurement department. This department sources goods and services for the manufacturing operation, including contract negotiations and order monitoring.
Supervisory salaries. This is the compensation paid to managers and supervisors overseeing production processes but not directly involved in manufacturing.
