Using the data below, what is the total for product costs? Administrative salaries $83,000 Depreciation on production equipment 75,000 Manufacturing direct labor 81,000 Manufacturing direct materials 199,000 Advertising 154,000 Lease on headquarters’ building 72,000 Indirect labor ** 29,000 Depreciation on sales equipment 44,000 Sales commissions 37,000 Production manager's salary 225,000 Indirect labor ** is a variable cost Total $999,000 O A. $646,000 В. $609,000 OC. $580,000 D. $534,000

Principles of Accounting Volume 2
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Chapter5: Process Costing
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Using the data below, what is the total for product costs?
Administrative salaries
$83,000
Depreciation on production equipment
75,000
Manufacturing direct labor
81,000
Manufacturing direct materials
199,000
Advertising
154,000
Lease on headquarters’ building
72,000
Indirect labor **
29,000
Depreciation on sales equipment
44,000
Sales commissions
37,000
Production manager's salary
225,000
Indirect labor ** is a variable cost
Total
$999,000
O A.
$646,000
O B. $609,000
OC. $580,000
D. $534,000
Transcribed Image Text:Using the data below, what is the total for product costs? Administrative salaries $83,000 Depreciation on production equipment 75,000 Manufacturing direct labor 81,000 Manufacturing direct materials 199,000 Advertising 154,000 Lease on headquarters’ building 72,000 Indirect labor ** 29,000 Depreciation on sales equipment 44,000 Sales commissions 37,000 Production manager's salary 225,000 Indirect labor ** is a variable cost Total $999,000 O A. $646,000 O B. $609,000 OC. $580,000 D. $534,000
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Step 1

Meaning of Product Cost :- 

Product cost refers to the costs incurred to create a product. These costs include direct labor, direct material, consumable production supplies, and factory overhead. Product cost can also be considered the cost of the labor required to deliver a service to a customer.. In the latter case, product cost should include all costs related to a service, such as compensation, payroll taxes, and employee benefits.

 

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