Claire Corporation’s trial balance includes the following expenses: Raw materials used in production $5,500 Raw materials...

Claire Corporation’s trial balance includes the following expenses:

Raw materials used in production	$5,500
Raw materials purchased	6,500
General manager salary	50,000
Sales manager salary	30,000
Direct labor incurred	130,000
General liability insurance premium	3,000
Factory rent	24,000
Office lease	18,000
Factory utilities	12,000
Depreciation on factory equipment	14,000

Assuming no change in the work in process and finished goods inventory balances for the year, what total amount should Claire report as a product expense?

Select one:

a. $171,500

b. $185,500

c. $186,500

d. $236,500

Expert Solution

Correct answer---------(b) $185,500

Working

Raw materials used in production	$ 5,500.00
Direct labor incurred	$ 130,000.00
Factory rent	$ 24,000.00
Factory utilities	$ 12,000.00
Depreciation on factory equipment	$ 14,000.00
Total product cost	$ 185,500.00

Product and period cost classification is also provided below

Raw materials used in production	$ 5,500.00	Product cost
Raw materials purchased	$ 6,500.00
General manager salary	$ 50,000.00	Period cost
Sales manager salary	$ 30,000.00	Period cost
Direct labor incurred	$ 130,000.00	product cost
General liability insurance premium	$ 3,000.00	Period cost
Factory rent	$ 24,000.00	product cost
Office lease	$ 18,000.00	Period cost
Factory utilities	$ 12,000.00	product cost
Depreciation on factory equipment	$ 14,000.00	product cost

ekkarill92 answered 9 months ago

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