The total amount of indirect manufacturing cost incurred is closest to $25,300
What are Indirect Manufacturing Costs?
- Production expenses that can't be immediately linked to a produced unit are referred to as indirect manufacturing costs. These expenses include, for instance, those for supplies, depreciation, utilities, production supervisor salaries, and equipment maintenance.
- Indirect manufacturing expenses are gathered into a pool of overhead costs for financial reporting and distributed according to the quantity of units produced during a reporting period; this process results in some capitalization of these costs into the inventory asset.
- Managerial accountants are required to record these expenses in an account and then divide them among the products generated. These expenses are a significant portion of the overall production costs, to put it briefly.
Total Indirect Manufacturing Overhead = Depreciation + Repairs and Maintenance + Office Electricity Expense + Salaries + Factory supplies
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