Question

Knight Company reports the following costs and expenses in May.

Factory utilities		$16,000		Direct labor		$72,700
Depreciation on factory equipment		14,250		Sales salaries		50,000
Depreciation on delivery trucks		4,900		Property taxes on factory building		2,600
Indirect factory labor		53,500		Repairs to office equipment		1,800
Indirect materials		85,000		Factory repairs		2,970
Direct materials used		141,700		Advertising		15,600
Factory manager’s salary		8,100		Office supplies used		3,420

From the information:

Determine the total amount of manufacturing overhead. Manufacturing overhead $ Determine the total amount of product costs. Product costs $

Determine the total amount of period costs.

Period costs

$

Answer 1

Solution

Manufacturing Overhead = $182,420

Product Cost = $396,820

Period cost= $75,720

Working

Manufacturing overheads
Factory utilities	$        16,000.00
Depreciation on factory equipment	$        14,250.00
Indirect factory labor	$        53,500.00
Indirect materials	$        85,000.00
Factory manager’s salary	$          8,100.00
Property taxes on factory building	$          2,600.00
Factory repairs	$          2,970.00
Total Manufacturing Overheads	$    1,82,420.00
Add: Direct materials used	$    1,41,700.00
Direct labor	$        72,700.00
Total Product cost	$    3,96,820.00

.

Sales salaries	$        50,000.00
Repairs to office equipment	$          1,800.00
Advertising	$        15,600.00
Office supplies used	$          3,420.00
Depreciation on delivery trucks	$          4,900.00
Period cost	$        75,720.00

All factory cost except direct material and direct labor are Factory overheads. All factory cost are product cost.

All cost other than factory cost are period cost.