Question

Knight Company reports the following costs and expenses in May. Factory utilities $16,120 Direct labor $69,685 Depreciation on factory equipment 13,703 Sales salaries 49,631 Depreciation on delivery trucks 4,044 Property taxes on factory building 2,894 Indirect factory labor 52,814 Repairs to office equipment 2,185 Indirect materials 83,926 Factory repairs 3,044 Direct materials used 139,734 Advertising 15,670 Factory manager’s salary 8,349 Office supplies used 3,307 From the information, determine the total amount of: (a) Manufacturing overhead $ (b) Product costs $ (c) Period costs $

Answer 1

Answer:

a. $180,850

b. $390,269

c. $74,837

Explanation:

a. The computation of the manufacturing overhead is shown below:

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

=  $16,120  + $13,703 + $2,894 + $52,814 + $83,926 + $3,044  + $8,349

= $180,850

b. The computation of the product cost is shown below:

= Direct materials used + Direct labor +  manufacturing overhead

= $139,734 + $69,685 + $180,850

= $390,269

c. The computation of the period cost is shown below:

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

= $49,631 + $4,044 + $2,185 + $15,670 + $3,307

= $74,837