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Chapter 16: Q-4SE (page 886)

Computing manufacturing overhead

Sunglasses Unlimited Company manufactures sunglasses. Following is a list of costs the company incurred during May. Use the list to calculate the total manufacturing overhead costs for the month.

Glue for frames $ 250

Depreciation on company cars used by sales force 4,000

Plant depreciation 7,500

Interest Expense 1,500

Lenses 52,000

Company president’s salary 24,500

Plant foreman’s salary 3,500

Plant janitor’s wages 1,300

Oil for manufacturing equipment 150

Short Answer

Expert verified

The total manufacturing overhead is $12,700

Step by step solution

01

Definition of Manufacturing Overhead

The manufacturing overhead is defined as the indirect cost which cannot be easily traceable to any specific product.

02

Computation of manufacturing overhead

Sunglass Unlimited Company

Computation of total manufacturing overhead

Manufacturing Overhead

Amount ($)

Glues for frames

$250

Plant Depreciation

$7,500

Plant Foreman’s Salary

$3,500

Plant janitors’ salary

$1,300

Oil for manufacturing equipment

$150

Total manufacturing overhead

$12,700

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Most popular questions from this chapter

Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):

3. Is not required to follow GAAP.

Question:Determining flow of costs through a manufacturer’s inventory accounts

Root Shoe Company makes loafers. During the most recent year, Root incurred total manufacturing costs of \(26,300,000. Of this amount, \)2,000,000 was direct materials used and \(19,800,000 was direct labor. Beginning balances for the year were Direct Materials, \)700,000; Work-in-Process Inventory, \(1,500,000; and Finished Goods Inventory, \)400,000. At the end of the year, balances were Direct Materials, \(800,000; Work-in-Process Inventory, \)1,200,000; and Finished Goods Inventory, $600,000.

Requirements Analyze the inventory accounts to determine:

1. Cost of direct materials purchased during the year.

2. Cost of goods manufactured for the year.

3. Cost of goods sold for the year.

Computing cost of goods manufactured

Consider the following partially completed schedules of cost of goods manufactured. Compute the missing amounts.

Banner, Inc. Larry’s Bakery Sports Gear

Beginning Work-in-Process Inventory \( (a) \) 40,800 \( 2,200

Direct Materials Used 14,400 35,900 (g)

Direct Labor 10,300 20,100 1,900

Manufacturing Overhead (b) 10,000 900

Total Manufacturing Costs Incurred during the Year 45,200 (d) (h)

Total Manufacturing Costs to Account for 55,400 (e) 8,300

Ending Work-in-Process Inventory (c) (25,500) (2,600)

Cost of Goods Manufactured \) 50,500 \( (f) \) (i)

Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:

e. Cost of chemicals to treat the paper.

Determining the flow of costs through a manufacturer’s inventory accounts

True Fit Shoe Company makes loafers. During the most recent year, True Fit incurred total manufacturing costs of \(21,900,000. Of this amount, \)2,600,000 was direct materials used and \(14,800,000 was direct labor. Beginning balances for the year were Direct Materials, \)700,000; Work-in-Process Inventory, \(1,500,000; and Finished Goods Inventory, \)1,100,000. At the end of the year, balances were Direct Materials, \(800,000; Work-in-Process Inventory, \)2,000,000; and Finished Goods Inventory, $1,080,000.

Requirements Analyze the inventory accounts to determine:

1. Cost of direct materials purchased during the year.

2. Cost of goods manufactured for the year.

3. Cost of goods sold for the year.
See all solutions

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