Question

A company incurred the following costs: $6,000 for indirect labor; $26,000 for direct labor; $2,500 for utilities for the factory building; $10,300 for factory equipment depreciation; $8,700 for office equipment depreciation. The total overhead costs reported on the schedule of cost of goods manufactured is

Answer 1

Answer:

$18,800.00

Explanation:

Overhead costs are the indirect and fixed expenses that cannot be directly associated with a product. They are associated with the production or manufacturing of goods.

In this case

The manufacturing expenses that cannot be attached to a product are

Indirect labor:     $ 6,000.00

Factory utilities:     $ 2,500.00

factor equipment deprecation  $10,300.00

      $18,800.00

Total overhead costs are $18,800.00

Answer 2

The total overhead costs reported on the schedule of cost of goods manufactured is $18,800.00

• Overhead costs are the cost associated with running a business. They are costs that cannot be traced to a specific unit or department in an organisation.  

Examples of  overhead costs include :  

1. indirect labor costs  

2. rent  

3. indirect material costs.  

4. depreciation of plants and machinery

5. Sales and administrative cost

Total overhead costs = cost of indirect labour + depreciation of factory equipment + utilities  

$6,000 + $10,300 +  $2,500  = $18,800

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