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20 December, 16:50

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.

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  1. 20 December, 16:58
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    Total overhead = $267,000

    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.
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