Question

Smith Company manufactures washing machines in their own facility. They sell them to stores like Best Buy and Lowes for ultimate sale to the consumer. Here are some costs for Smith Company. Calculate total PRODUCT costs for Smith Company. $20906 Direct Labor Sales and Marketing Expenses Metal to make the exterior shell of $50181 the washing machines Electricity to run the machinery in $18939 the factory $23289 Salary of the manager who oversees manufacturing $8204 Salary of the Chief Operating Officer of the Company Water bill for the building that houses corporate headquarters $16665 $2100

Answer 1

Answer:

$98,233

Explanation:

Total product costs = direct labor costs + direct material costs + factory overhead

In this case, we must add up the following costs:

• Direct labor = $20,906
• Metal to make the exterior shell of the washing machines (direct material cost) = $50,181
• Electricity to run the machinery in the factory (factory overhead) = $18,939
• Salary of the manager who oversees manufacturing = $8,204

Total product costs = $98,233

The waterbill for the HQ, the salary of the CEO, and the marketing expenses are not included in the calculation because they are not factory overhead specifically.