Question

Derrald Company manufactures snowboards. Costs for January were as follows. Indirect labor........................................................................................ $11,000 Direct materials...................................................................................... 36,000 Income tax expense.............................................................................. 14,000 Indirect materials..................................................................................... 5,000 Property taxes on the factory building.............................................. 18,000 Direct labor............................................................................................. 31,000 Salespersons commissions..................................................................... 9,000 Interest expense..................................................................................... 17,000 Insurance on manufacturing equipment.......................................... 12,000 What is Derrald Company's actual manufacturing overhead for January?

Answer 1

Answer:

$86,000

Explanation:

The computation of the actual manufacturing overhead for January month is shown below:

= Indirect labor + income tax expense + indirect materials + property taxes on the factory equipment + Salespersons commissions + Interest expense + Insurance on manufacturing equipment

= $11,000 + $14,000 + $5,000 + $18,000 + $9,000 + $17,000 + $12,000

= $86,000

We simply added all indirect cost and ignored all direct cost