Steuben Company produces dog houses. During the current year, Steuben Company incurred the following costs: Rent on manufacturing facility $ 250,000 Office manager's salary 150, 000 Wages of factory machine operators 110,000 Depreciation on manufacturing equipment 50, 000 Insurance and taxes on selling and administrative offices 30,000 Direct materials purchased and used 170,000 Based on the above information, which of the following would not be treated as a product cost: Multiple Choice Depreciation on manufacturing equipment Wages of factory machine operators Office manager's salary Rent expense incurred on manufacturing facility

Steuben Company produces dog houses. During the current year, Steuben Company incurred the following costs: Rent on manufacturing facility $ 250,000 Office manager's salary 150, 000 Wages of factory machine operators 110,000 Depreciation on manufacturing equipment 50, 000 Insurance and taxes on selling and administrative offices 30,000 Direct materials purchased and used 170,000 Based on the above information, which of the following would not be treated as a product cost: Multiple Choice Depreciation on manufacturing equipment Wages of factory machine operators Office manager's salary Rent expense incurred on manufacturing facility

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(Management Accounting) Davidson Company produces a part that is used in the manufacture of one of its products. The costs associated with the production of 5,000 units of this part are as follows: Direct materials $108,000 Direct labor 156,000 Variable factory overhead 70,000 Fixed factory overhead 168,000 Total costs $502,000 Of the fixed factory overhead costs, $72,000 are avoidable. Assuming there is no other use for the facilities. What is the highest price Davidson Company should be willing to pay for 5,000 units of the part? A) $264,000 B) $334,000 C) $406,000 D) $502,000
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