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Q-4SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 886

Short Answer

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

The total manufacturing overhead is $12,700

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Step by Step Solution

Definition of Manufacturing Overhead

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

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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