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21 January, 09:11

Marigold Company reports the following costs and expenses in May. Factory utilities $16,200 Direct labor $73,000 Depreciation on factory equipment 14,350 Sales salaries 51,000 Depreciation on delivery trucks 4,300 Property taxes on factory building 2,800 Indirect factory labor 50,700 Repairs to office equipment 1,400 Indirect materials 82,800 Factory repairs 3,040 Direct materials used 141,700 Advertising 16,800 Factory manager's salary 8,100 Office supplies used 3,630 From the information:

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  1. 21 January, 09:22
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    A. Manufacturing Overhead = $177,990

    B. Product Costs = $214,700

    C. Period costs = $77,130

    Explanation:

    A. Manufacturing overhead is the combination of indirect labor, indirect cost, and indirect material.

    Manufacturing overhead Amount

    Factory utilities $16,200

    Depreciation on factory equipment $14,350

    Property taxes on factory building $2,800

    Indirect factory labor $50,700

    Indirect materials used $82,800

    Factory repairs $3,040

    Factory manager's salary $8,100

    Total $177,990

    Requirement B

    B. Product cost is the cost that is directly aligned with the product. Alternatively, more precisely, it can be traceable with the manufacturing of a product. It is a combination of direct material and direct labor.

    Product Cost Amount

    Direct labor $73,000

    Direct materials used 141,700

    Total Product cost $214,700

    Requirement C

    C. Period cost is the cost that is not directly required to produce a product. However, that cost is necessary to measure the total cost incurred for a product manufactured. The example of product cost includes sales commission, office rent, and advertising expense.

    Period Cost Amount

    Sales salaries $51,000

    Depreciation on delivery trucks 4,300

    Repairs to office equipment 1,400

    Advertising 16,800

    Office supplies used 3,630

    Total Period costs $77,130
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