Question

Knight Company reports the following costs and expenses in May. Direct labor Sales salaries Factory utilities Depreciation on factory equipment Depreciation on delivery trucks Indirect factory labor Indirect materials Direct materials used Factory manager's salary $16,500 14,750 4,000 54,000 81,700 141,700 Property taxes on factory building Repairs to office equipment Factory repairs Advertising Office supplies used $74,000 49,300 2,900 1,600 2,740 16,600 2,990 8,300 From the information:

Determine the: Manufacturing overhead, Product costs, and Period costs.

Answer 1

Ans. 1	Particulars	Amount
	Factory utilities	$16,500
	Depreciation on factory equipment	$14,750
	Indirect factory labor	$54,000
	Indirect materials	$81,700
	Factory manager's salary	$8,300
	Property taxes on factory building	$2,900
	Factory repairs	$2,740
	Total manufacturing overhead costs	$180,890
	*Only indirect manufacturing costs are known as manufacturing overhead costs.
Ans. 2	Particulars	Amount
	Direct materials used	$141,700
	Direct labor	$74,000
	Total manufacturing overhead costs	$180,890
	Total product cost	$396,590
	*Total product cost is the sum of all manufacturing costs whether they are
	direct or indirect.
Ans. 3	Particulars	Amount
	Depreciation on delivery trucks	$4,000
	Sales salaries	$49,300
	Repairs to office equipment	$1,600
	Advertising	$16,600
	Office supplies used	$2,990
	Total period costs	$74,490
	*Total period cost is the sum of all selling, general, office and administrative costs.