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Castillo Co

question 203

Essay

Castillo Co.manufactures staples.Costs for October were direct labor,$84,000; indirect labor,$36,700; direct materials,$55,900; factory maintenance,$4,800; factory utilities,$3,200; and insurance on plant and equipment,$700.What is the company's total factory overhead cost for October?


Definitions:

Factory Overhead

All indirect costs, including indirect materials, labor, and expenses, incurred during the manufacturing process.

Machine Hours

A measure of production time or operation, referring to the total hours a machine is used or operates within a given period.

Overapplied Amount

This term refers to a situation where the allocated or applied costs in cost accounting exceed the actual costs incurred.

Factory Overhead Rate

A cost allocation rate used in manufacturing to assign estimated overhead costs to production activities or output, based on a predetermined formula.

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