Question

Country Furniture Company manufactures furniture at its​ Akron, Ohio, factory. Some of its costs from the past year​ include:

Depreciation on sales office ​$     9,600

Depreciation on factory equipment 16,800

Factory supervisor salary 50,000

Sales commissions 23,400

Lubricants used in factory equipment 3,800

Insurance costs for factory 21 comma 000 21,000

Wages paid to maintenance workers 115 comma 600 115,600

Fabric used to upholster furniture 10 comma 700 10,700

Freight minus −in ​(on raw​ materials) 3 comma 300 3,300

Costs of delivery to customers 9 comma 700 9,700

Wages paid to assembly minus −line workers 115 comma 700 115,700

Lumber used to build product 82 comma 700 82,700

Utilities in factory 54 comma 400 54,400

Utilities in sales office 26 comma 400 26,400

Manufacturing overhead costs for Country Furniture Company totaled

Answer 1

	Particulars	Amount $
	Depreciation on factory equipment	16,800
	Factory supervisor salary	50,000
	Lubricants used in factory equipment	3,800
	Insurance cost for factory	21,000
	Wages paid to maintenance workers	115,600
	Utilities in factory	54,400
	Total manufacturing overhead costs	261,600

Note:

(1) Manufacturing overhead cost includes indirect expenses

(2) Wages paid to assembly line workers is a direct labor cost.

(3 ) Fabric used to upholster furniture, Freight in and Lumber used to build product is the direct materials expenses.

(4) Depreciation on sales office, Sales commissions, Cost of delivery to customers and utilities in sales office Expenses are not related to manufacturing process, these expenses will be classified as selling and administration purpose.