Question

The B&T Company's production costs for May are: direct labor, $14,000; indirect labor, $6,600; direct materials, $15,100; property taxes on production facility, $810; factory heat, lights and power, $1,010; and insurance on plant and equipment, $210. B&T Company's factory overhead incurred for May is:

Answer 1

Answer:

$8630

Explanation:

Firstly, we need to know the meaning of factory overhead.

Factory overheads are the costs incurred during the throughout the manufacturing activities, exclusive of the costs of direct labor and direct materials. Example of factory overhead are

1. Factory utilities

2. Insurance on production

facilities and equipment

3.Property taxes on

production facilities

4. insurance on plant and

equipment

5. All forms of indirect labour etc

For the question above, the factory overhead is simply the sum of all the cost provided in the question except the cost of direct labour and direct materials.

Factory overhead=$6,600+$810+$1,010+$210 = $8630

Answer 2

Answer:

B&T Company's factory overhead incurred for May is $8,630.

Explanation:

Overhead cost are those cost which is not directly attributable to any product or service or department. All the indirect expenses are classified as overhead of the company e.g. rent, advertising, insurance, interest, legal fees, labor burden, repairs, accounting fees, taxes, utilities, telephone bills, travel expenditures and supplies.

Factory Overheads

Indirect labor                                          $6,600

Property taxes on production facility   $810

Factory heat, lights and power             $1,010

Insurance on plant and equipment      $210    

Total Overhead cost                             $8,630