Question

Question Description

Knight Company reports the following costs and expenses in May.

Factory utilities		$15,500		Direct labor		$69,100
Depreciation on factory equipment		12,650		Sales salaries		46,400
Depreciation on delivery trucks		3,800		Property taxes on factory building		2,500
Indirect factory labor		48,900		Repairs to office equipment		1,300
Indirect materials		80,800		Factory repairs		2,000
Direct materials used		137,600		Advertising		15,000
Factory manager’s salary		8,000		Office supplies used		2,640

From the information, determine the total amount of:

(a) Manufacturing overhead $
(b) Product costs $
(c) Period costs $

Answer 1

(a) Calculation of manufacturing overhead

Particulars	Amount$
Factory utilities	15,500
Depreciation on factory Equipment	12,650
Indirect factory labor	48,900
Indirect materials	80,000
Factory manager's Salary	8,000
Property taxes on factory building	2,000
Factory repairs	2,000
Manufacturing overhead	1,70,350

(b) Calculation of Product Costs

Particulars	Amount$
Direct materials	1,37,600
Direct Labor	69,100
Manufacturing overhead	1,70,350
Product costs	3,77,050

(C) Calculation of Period Costs

Particulars	Amount$
Depreciation on Delivery Trucks	3,800
Sales Salaries	46,400
Repairs to office Equipment	1,300
Advertising	15,000
Office Supplies Used	2,640
Period Costs	69,140

(a) Manufacturing overhead  = $1,70,350

(b) Product Costs = $3,77,050

(c) Period Costs =  $69,140