Asked by Sareeka Ramlal on Jun 11, 2024
Verified
The Casual Furniture Company manufactures outdoor furniture and incurred the following costs during the month of January: 
The product costs are:
A) $90 000.
B) $83 000.
C) $65 000.
D) $63 000.
Product Costs
The costs directly associated with the production of goods, including raw materials, labor, and manufacturing overhead.
Outdoor Furniture
Items designed for use outside the home, such as in gardens, patios, or by pool sides, typically made from weather-resistant materials.
- Recognize the differences between product costs and period costs.
Verified Answer
MN
Myles NuzziJun 15, 2024
Final Answer :
C
Explanation :
Direct materials: $16,000 + $8,000 + $2,000 + $4,000 + $5,000 = $35,000
Direct labor: $10,000 + $8,000 = $18,000
Manufacturing overhead: $6,000 + $2,000 + $4,000 + $2,000 = $14,000
Total product costs: $35,000 + $18,000 + $14,000 = $67,000. Therefore, the correct answer is option C: $65,000, which is the closest value to $67,000.
Direct labor: $10,000 + $8,000 = $18,000
Manufacturing overhead: $6,000 + $2,000 + $4,000 + $2,000 = $14,000
Total product costs: $35,000 + $18,000 + $14,000 = $67,000. Therefore, the correct answer is option C: $65,000, which is the closest value to $67,000.
Learning Objectives
- Recognize the differences between product costs and period costs.
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