Question

Knight Company reports the following costs and expenses in May. Factory utilities $17,293 Direct labor $70,081 Depreciation on factory equipment 14,583 Sales salaries 47,442 Depreciation on delivery trucks 4,857 Property taxes on factory building 3,558 Indirect factory labor 49,983 Repairs to office equipment 1,908 Indirect materials 85,854 Factory repairs 2,240 Direct materials used 139,412 Advertising 16,634 Factory manager’s salary 8,522 Office supplies used 3,199 From the information, determine the total amount of: (a) Manufacturing overhead $ (b) Product costs $ (c) Period costs $

Answer 1

Answer:

a. $182,063

b. $391,556

c. $74,040

Explanation:

(a) The computation of the manufacturing overhead is shown below:

=  Factory utilities + Depreciation on factory equipment + Indirect factory labor + Indirect materials + Property taxes on factory building +  Factory repairs + Factory manager’s salary

= $17,293 + $14,583 + $49,983 + $85,854 + $3,558 + $2,240 + $8,552

= $182,063

(b) The computation of the product cost is shown below:

= Direct material + direct labor + manufacturing overhead

= $139,412 + $70,081 + $182,063

= $391,556

(c) The computation of the period cost is shown below:

= Depreciation on delivery trucks + Repairs to office equipment +  Advertising + Office supplies used + sales salaries

= $4,857 + $1,908 + $16,634 + $3,199 + $47,442

= $74,040