Question

Robin Company has the following balances for the current month: Direct materials used Direct labor Sales salaries Indirect labor Production manager's salary Marketing costs Factory lease $10,000 $25,000 $ 9,800 $ 2,000 $ 6,450 $ 9,650 $ 4,300 What is Robin's total manufacturing overhead?

Answer 1

TOTAL MANUFACTURING OVERHEAD = $ 12,750

• Manufacturing overhead is the indirect costs incurred for the production process.
• Direct materials and direct labor costs are direct costs and hence directly assigned to the products manufactured and not included in the manufacturing overhead.
• Selling and administrative costs are not manufacturing overhead. Therefore, sales salaries and marketing costs are not included in manufacturing overhead.
• Indirect labor is a manufacturing overhead since it is related to production.
• Factory lease is also a manufacturing overhead since it is incurred for the production activity.

Indirect labor 2,000 Production manager's salary Factory lease Total manufacturing overhead 6,450 4,300 $ 12,750