Gell Corporation manufactures computers. Assume that Gell:
•allocates manufacturing overhead based on machine hours
•estimated 12,000 machine hours and $ 93,000 of manufacturing overhead •costs actually used 16,000 machine hours and incurred the following actual costs:

Indirect labor 11,000
Depreciation on plant 48,000
Machinery repair 11,000
Direct labor 75,000
Plant supplies 6,000
Plant Utilities 7,000
Advertising 35,000
Sales commissions 27,000

What is Gell's actual manufacturing overhead cost?

$83,000

Explanation:

The computation of the actual manufacturing overhead cost is shown below:

= Indirect labor + depreciation on plant + machinery repair + plant supplies + plant utilities

= $11,000 + $48,000 + $11,000 + $6,000 + $7,000

= $83,000

Only these five items would be considered as a actual manufacturing cost. The rest of the items would be ignored

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