Question

A review of the accounting records of Finch Manufacturing indicated that the company incurred the following payroll costs during the month of March. Assume the company's financial statements are prepared in accordance with GAAP. Salary of the company president—$31,900. Salary of the vice president of manufacturing—$15,900. Salary of the chief financial officer—$17,900. Salary of the vice president of marketing—$15,000. Salaries of middle managers (department heads, production supervisors) in manufacturing plant—$192,000. Wages of production workers—$930,000. Salaries of administrative secretaries—$107,000. Salaries of engineers and other personnel responsible for maintaining production equipment—$172,000. Commissions paid to sales staff—$256,000.

\Required What amount of payroll cost would be classified as SG&A expense? Assuming that Finch made 3,800 units of product and sold 2,850 of them during the month of March, determine the amount of payroll cost that would be included in cost of goods sold. (Do not round intermediate calculations.)

Answer 1

a	Payroll cost	$
	Salary of Company President	$             31,900
	Salary of Chief Financial officer	$             17,900
	Salary of vice president of Marketing	$             15,000
	Salaries of administrative salaries	$         107,000
	Commission Paid to sales staff	$         256,000
	Payroll cost would include in SG & A Cost	$         427,800
b	Payroll cost included of cost of goods sold
	Salary of vice president of manufacturing	$             15,900
	Salaries of middle managers in manufacturing plant	$         192,000
	Wages on production workers	$         930,000
	Salaries of engineers and other personnel of production department	$         172,000
	Payroll cost included of cost of goods sold	$       1,309,900
	Cost of goods sold
	$1309900*2850/3800	$         982,425