Given the following: Advertising Expense Delivery Expense Depreciation Expense -
ID: 2459439 • Letter: G
Question
Given the following:
Advertising Expense
Delivery Expense
Depreciation Expense - Company Headquarters Office Equipment
Depreciation Expense - Factory Equipment
Direct Labor
Direct Materials
Indirect Labor
Indirect Materials
Property Tax Expense - Corporate Headquarters
Property Tax Expense - Factory
Total Conversion Costs
Utilities Expense - Corporate Headquarters
Utilities Expense - Factory
What is the amount of property tax expense for the factory?
Advertising Expense
$ 32,000Delivery Expense
16,000Depreciation Expense - Company Headquarters Office Equipment
64,000Depreciation Expense - Factory Equipment
72,000Direct Labor
117,000Direct Materials
81,000Indirect Labor
41,000Indirect Materials
29,000Property Tax Expense - Corporate Headquarters
15,000Property Tax Expense - Factory
??Total Conversion Costs
318,000Utilities Expense - Corporate Headquarters
35,000Utilities Expense - Factory
38,000Explanation / Answer
Total conversion cost = $318,000
Conversion costs include direct labor cost and total manufacturing overhead costs.
Direct labor cost = $117,000
Therefore,
Total manufacturing ovehread costs = $318,000 - $117,000 = $201,000
In the given list of costs, the following items are included in total manufacturing ovehread costs.
Depreciation expense - Factory equipment = $72,000
Indirect labor = $41,000
Indirect materials = $29,000
Property tax expense - Factory = ??
Utilities Expense - Factory = $38,000
Now if we add all the known manufacturing overheads we get $180,000.
But the totalmanufacturing overhead as calculated above is $201,000
Therefore,
Property tax expense = $201,000 - $180,000 = $21,000.
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