Question

Happy Feet Running Company manufactures running shoes and has the following costs during the past​ month:

Rubber used to make the product	$37,000
Gel used to make the product	$25,000
Fabric used to make the product	$27,000
Lubricants used in the factory equipment	$2,200
Glue used to make the product	850
Wages paid to maintenance workers in the factory	$7,500
Wages paid to assembly line workers	​10,000
Wages paid to factory supervisor	$7,500
Wages paid to CFO	​25,000
Depreciation on factory equipment	$25,250
Depreciation on the accounting​ department's computers	​3,000
Depreciation on the sales force vehicles	$5,100
Utilities for factory	$4,200
Cost of shipping to customers	$12,000
Property tax on factory equipment	​1,000
Property insurance for the factory	$1,300
Cardboard material to box each pair of shoes	​6,250
Commissions paid to sales force	$7,800
Office supplies for accounting department	250
Janitorial supplies for the factory	$625

What is the total manufacturing overhead for Happy Feet Running Company for the​ month?

a.)48,125

b.)74,425

c.)50,425

d.)62,675

Answer 1

Answers : -

The correct option is C. $50,425

The manufacturing overhead is the neither the direct cost nor the direct labour cost but are associated with the production which are necessary expenses.

Calculations : -

Depreciation on equipment + computers + vehicles = $25,250 + $3,000 + $5,100 = $33,350

Utilities + shipping cost = $4,200 + $12,000 = $16,200

office supplies + janitorial supplies =$250 + $625 = $875

Total = $50,425. ( $33,350 + $16,200 + $875)