Kennedy Company reports the following costs and expenses in May. Factory utilities $ 16,500
Depreciation on factory equipment 12,650
Direct labor 79100
Sales salaries 48400
Property taxes on factory building 2500
Repairs to office equipment 1300
Factory repairs 2000
Advertising 23,000
Depreciation on delivery trucks 3800
Indirect factory labor 48900
Indirect materials 70800
Direct materials used 157600
Factory manager's salary 8000
Office supplies used 4640
Instructions:
From the information, determine the total amount of:.
(a) Manufacturing overhead.
(b) Product costs.
(c) Period costs.

Answer and Explanation:

The computation is shown below:

a. The manufacturing overhead is

= factory utilities + depreciation on factory equipment + indirect factory labor + indirect material + factory manager salary + property tax + factory repairs

= $16,500 + $12,650 + $48,900 + $70,800 + $8,000 + $2,500 + $2,000

= $161,350

b. The product cost is

= Direct material used + direct labor + total manufacturing overhead

= $157,600 +  $79,100 + $161,350

= $398,050

c.  The period cost is

= Depreciation on delivery truck + sales salaries + repairs to office equipment + advertising + office supplies used

= $3,800 + $48,400 + $1,300 + $23,000 + $4,640

= $81,140

c

explanation:

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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