Question

A company that produced 1,000 units and sold 800 units had the following costs:

Direct materials $150,000
Factory building and equipment depreciation $250,000
Sales salaries $130,000
Office building and equipment depreciation $170,000
Office salaries $200,000
Factory insurance, utilities, etc. $300,000
Factory wages $100,000
Office insurance, utilities, etc. $140,000

Total product cost is:

A. $800,000
B. $580,000
C. $640,000
D. $1,440,000

Answer 1

Answer:

Option A,$800,000 is the correct option

Explanation:

Total product cost includes the direct material costs.direct labor costs as well as the manufacturing overhead.

The product costs only include costs incurred directly or indirectly in order to produce the products.

product costs=direct materials+factory building and equipment depreciation+factory insurance,utilities e.t.c+factory wages=$150,000+$250,000+$300,000+100,000=$800,000