Question

Knight Company reports the following costs and expenses in May:

Factory Utilities $16,961 Direct Labor $72,938
Depreciation on factory equipment $14,265 Sales salaries $49,143
Depreciation on delivery trucks $4,585 Property taxes on factory building $2,798
Indirect factory labor $52,541 Repairs to office equipment $1,888
Indirect materials $84,605 Factory repairs $2,583
Direct materials used $139,406 Advertising $15,233
Factory manager's salary $8,593 Office supplies used $2,878
From the information, determine the total amount of:

(a) Manufacturing Overhead

(b) Product Costs

(c) Period Costs

Answer 1

Answer and Explanation:

The computation is shown below:

a. For manufacturing overhead cost

= Factory utilities + Depreciation on Factory equipment + Property tax on Factory building + Indirect Factory labor + Indirect Material + Factory repairs + Factory manager's salary

= $16,961 + $14,265 + $2,798 + $52,541 + $84,605 + $2,583 + $8,593

= $182,346

b. For product costs

= Direct Material used + Direct Labor used + Manufacturing Overhead

= $139,406 + $72,983 + $182,346

= $394,735

3) For period costs

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

= $49,143 + $4,585 + $1,888 + $15,233 + $2,878

= $73,727

We simply applied the above formulas