Question

The following costs are included in a recent summary of data for a company: advertising expense, $99,500; depreciation expense - factory building, $147,500; direct labor, $264,500; direct material used, $314,500; factory utilities, $119,500; and sales salaries expense, $164,500. Determine the dollar amount of overhead costs.

Answer 1

Total overhead= $267,000

Step-by-step explanation:

Giving the following information:

advertising expense, $99,500

depreciation expense - factory building, $147,500

direct labor, $264,500

direct material used, $314,500

factory utilities, $119,500

sales salaries expense, $164,500.

The overhead costs are all costs incurred involved in the production, but can't be directly assigned to a single product line.

Total overhead= depreciation of factory + factory utilities

Total overhead= 147,500 + 119,500= $267,000

Depreciation is not a cash disbursement.