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8 March, 22:32

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.

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  1. 8 March, 22:55
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    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
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