Knight Company reports the following costs and expenses in May.
Factory utilities - $15,730 Direct labor $73,307
Depreciation on factory equipment - 14,740 Sales salaries - 48,473
Depreciation on delivery trucks - 4,256 Property taxes on factory building - 2,897
Indirect factory labor - 53,233 Repairs to office equipment - 2,073
Indirect materials - 83,496 Factory repairs - 2,174
Direct materials used - 139,417 Advertising - 16,515
Factory manager’s salary - 8,367 Office supplies used - 3,599
From the information, determine the total amount of:
a) Manufacturing Overhead - $180,637
b) Product Costs - ?????????????????
c) Peroid Costs - $74,916
1 Answer
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Product costs are those costs assigned to an inventory account that eventually become part of cost of goods sold. Examples of manufacturing product costs are raw materials used, direct labor, factory supervisor's salary, and factory utilities. In a manufacturing company, product costs are also called manufacturing costs.
a)
Factory utilities - $15,730
Depreciation on factory equipment - 14,740
Property taxes on factory building - 2,897
Indirect factory labor - 53,233
Indirect materials - 83,496
Factory repairs - 2,174
Factory manager’s salary - 8,367
Total $180,637
b) Product Costs
Direct materials used - 139,417
Direct labor $73,307
Manufacturing Overhead $180,637
Total $393,361
c) Period Costs
Sales salaries - 48,473
Depreciation on delivery trucks - 4,256
Repairs to office equipment - 2,073
Advertising - 16,515
Office supplies used - 3,599
Total $74,916