Factory utilities | $16,942 | Direct labor | $71,743 | |||
Depreciation on factory equipment | 13,387 | Sales salaries | 47,310 | |||
Depreciation on delivery trucks | 4,546 | Property taxes on factory building | 3,252 | |||
Indirect factory labor | 49,656 | Repairs to office equipment | 2,179 | |||
Indirect materials | 84,468 | Factory repairs | 2,465 | |||
Direct materials used | 142,667 | Advertising | 15,712 | |||
Factory manager%u2019s salary | 8,285 | Office supplies used | 3,523 |
(a) | Manufacturing overhead | $ | ||
(b) | Product costs | $ | ||
(c) | Period costs | $ |
Direct cost: Direct cost is any cost that is directly related to manufacturing a product or rendering a service. The direct cost may be classified into direct material cost, direct labor cost, and direct expenses.
Direct material cost: Direct material cost is the cost related to the purchase of the raw materials that are directly related to the production of the goods. It includes opening stock of materials, purchases, cost of purchases, and deductions related to the closing stock of materials.
Direct labor cost: It refers to the cost of providing wages to the workers who are directly associated with the production of goods or services rendered to the customers. The cost of direct labor includes the wages, payroll taxes, and all the benefits sponsored by a manufacturer.
Depreciation: Depreciation is the process of reducing the value of the assets. It is a non-cash expense of a company. The value of assets is reduced due to the wear and tear caused for assets by its usage.
Indirect costs: They are the costs that are not directly related to a particular asset. They are the costs that are normally referred to as overhead expenses. The indirect cost is applied on the basis of direct cost. For example: labor hours of employees involved in the construction of asset.
Manufacturing overhead costs: Costs, which do not relate directly with the manufacturing of products, are referred to as manufacturing overhead costs or indirect costs. Manufacturing overhead cost per unit is the cost of manufacturing overhead incurred to produce one unit of product.
Product cost: This is the total cost incurred to manufacture a product. Product costs include direct materials cost, direct labor costs, and manufacturing factory overhead costs.
Period cost: Period costs are the costs that are associated with the operational activities. It includes salaries or remuneration, selling expense, advertising expenses, packaging, and distribution expenses.
a)
Calculate the manufacturing overhead:
Therefore, the manufacturing overhead is $178,005.
b)
Calculate the product cost:
Therefore, the product cost is $392,415.
c)
Calculate the period cost:
Therefore, the period cost is $73,270.
Ans: Part aThe manufacturing overhead is $178,005.
Part bThe product cost is $392,415.
Part cThe period cost is $73,270.
Knight Company reports the following costs and expenses in May. Factory utilities $16,942 Direct labor $71,743...
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Knight Company reports the following costs and expenses in May. Factory utilities Depreciation on factory equipment $17,400 Direct labor $70,300 13,850Sales salaries 46,700 Property taxes on factory building 3,100 1,500 2,220 15,900 2,770 Depreciation on delivery trucks 3 q00 Indirect factory labor Indirect materials Direct materials used Factory manager's salary 53,700Repairs to office equipment 84,200 Factory repairs 137,700 Advertising 8,700 Office supplies used From the information: Determine the total amount of manufacturing overhead. Manufacturing overhead Determine the total amount of...
Knight Company reports the following costs and expenses in May Factory utilities Depreciation on factory equipment $16,300 Direct labor $70,400 13,050 Sales salaries 49,600 Property taxes on factory 4,900 building 52,600 Repairs to office equipment 82,100 Factory repairs Depreciation on delivery trucks Indirect factory labor Indirect materials Direct materials used Factory manager's salary 3,100 1,400 2,890 16,500 3,140 138,700 Advertising 9,000 Office supplies used From the information: Determine the total amount of manufacturing overhead. Manufacturing overhead LINK TO TEXT Determine...
Exercise 14-4 Knight Company reports the following costs and expenses in May. Factory utilities $16,200 Direct labor $69,800 Depreciation on factory equipment 13,350 Sales salaries 48,100 Depreciation on delivery trucks 4,900 Property taxes on factory building 3,500 Indirect factory labor 49,600 Repairs to office equipment 2,300 Indirect materials 82,900 Factory repairs 2,910 Direct materials used 138,700 Advertising 16,300 Factory manager’s salary 8,900 Office supplies used 2,850 From the information: Determine the total amount of manufacturing overhead. Manufacturing overhead $ Link...