Question

Consider the following costs for ABC Company for the current month:

Direct materials $33,000
Depreciation on factory equipment $12,000
Factory custodian’s salary $23,000
Direct labor $28,000
Utilities for factory facilities $9,000
Selling expenses $16,000
Production manager’s salary $34,000
Administrative expenses $21,000
What is the total amount of factory overhead included above?
Group of answer choices
a.$78,000
b.$139,000
c.$44,000
d.$37,000

Answer 1

The total factory overhead for ABC Company is $78,000, which includes depreciation on factory equipment, the factory custodian's salary, utilities for factory facilities, and the production manager's salary.

Step-by-step explanation:

To calculate the total amount of factory overhead for ABC Company, we must consider all indirect factory-related costs. These do not include direct materials and direct labor. From the costs provided, factory overhead includes depreciation on factory equipment, the factory custodian’s salary, utilities for factory facilities, and the production manager’s salary. Adding these costs together ($12,000 + $23,000 + $9,000 + $34,000), the total factory overhead comes to $78,000.