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29 April, 10:36

B&T Company's production costs for May are: direct labor, $18,000; indirect labor, $5,800; direct materials, $14,200; property taxes on production facility, $860; factory heat, lights and power, $920; and insurance on plant and equipment, $120. B&T Company's factory overhead incurred for May is:

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  1. 29 April, 13:29
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    The total overhead cost for May = $7,700

    Explanation:

    Given:

    Direct labor cost = $18,000

    Indirect labor cost = $5,800

    Direct materials = $14,200

    Property taxes on production facility = $860

    Factory heat, lights and power = $920

    Insurance on plant and equipment = $120

    Now,

    the overhead cost includes the costs that are not directly related with the production of the product i. e it includes:

    Indirect labor, Property taxes on production equipment, Heat light and power, and Insurance on plant and equipment

    Therefore,

    The total overhead cost for May = $5,800 + $860 + $920 + $120

    or

    The total overhead cost for May = $7,700
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