Question

Pharmco incurred the following costs while manufacturing its product: Materials used in production, $120,000; factory depreciation, $60,000; property taxes on the administrative offices, $12,000; labor costs of assembly-line workers, $95,000; factory supplies used, $8,000; advertising expense, $13,000; property taxes on the factory, $20,000; delivery expense, $23,000; salaries of the sales staff, $53,000; and sales commissions, $17,000. Total product costs for Pharmco area.$303,000.b.$315,000.c.$391,000.d. $421,000.

Answer 1

Answer:

Total product costs for Pharmco are a. $303,000

Explanation:

Product cost comprises all the factory costs incurred, which are directly related to production.

Here Product costs will be as follows:

Materials used                                 = $120,000

Add: Factory Depreciation             = $60,000

Add: Labor costs                             = $95,000

Add: Factory Supplies                    = $8,000

Add: Property taxes on factory      = $20,000

Total Product costs                         = $303,000