Ajax Company accumulated the following account information for the year:
$\begin{array}{ll}
\text { Beginning raw materials inventory } & \$ 6,000 \
\text { Indirect materials cost } & 2,000 \
\text { Indirect labor cost } & 5,000 \
\text { Maintenance of factory equipment } & 2,800 \
\text { Direct labor cost } & 7,000
\end{array}$
Using the above information,total factory overhead costs would be:
A) $9,800
B) $16,800
C) $15,800
D) $13,000
E) $7,800

Question

Ajax Company accumulated the following account information for the year:
$\begin{array}{ll}
\text { Beginning raw materials inventory } & \$ 6,000 \
\text { Indirect materials cost } & 2,000 \
\text { Indirect labor cost } & 5,000 \
\text { Maintenance of factory equipment } & 2,800 \
\text { Direct labor cost } & 7,000
\end{array}$ 
Using the above information,total factory overhead costs would be:
A) $9,800
B) $16,800
C) $15,800
D) $13,000
E) $7,800

Quizplus · Accepted Answer

Factory overhead costs include indirect materials, indirect labor, and maintenance of factory equipment. Therefore, the total factory overhead costs are $2,000 (indirect materials) + $5,000 (indirect labor) + $2,800 (maintenance) = $9,800.

Ajax Company Accumulated the Following Account Information for the Year