The R&R Company's production costs for August are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. R&R Company's factory overhead incurred for August is:

Question

Quizplus · Accepted Answer

Factory overhead includes all manufacturing costs that are not direct materials, direct labor, or related to the production of goods. In this case, the factory overhead includes indirect labor, property taxes, heat, lights, and power and insurance on plant and equipment.

Therefore, the factory overhead incurred for August is:

$6,500 (indirect labor) + $800 (property taxes) + $1,000 (heat, lights, and power) + $200 (insurance) = $8,500.

The R&R Company's Production Costs for August Are: Direct Labor