Chapter_1HWKSol

Chapter_1HWKSol - Chapter 1 - Management Accounting and...

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Chapter 1 - Management Accounting and Corporate Governance Exercise 1-7A a. Payroll costs that would be classified as general, selling, and administrative expense include the following: Salary of the company president $ 128,000 Salary of the chief financial officer 75,200 Salary of the vice president of marketing 62,400 Salaries of administrative secretaries 448,000 Commissions paid to sales staff 1,008,000 Total $1,721,600 b. Payroll costs that would be classified as product cost include the following: Salary of the vice president of manufacturing $ 64,000 Salary of middle managers in manufacturing plant 784,000 Wages of production workers 3,752,000 Salaries of engineers and maintenance crew 712,000 Total $5,312,000 Since 3,600 units of 4,000 finished products were sold, 90% ( i.e. 3,600 ÷ 4,000) of the product cost would be classified as cost of goods sold. Therefore, the payroll cost that would be included in cost of goods sold is determined as follows: $5,312,000 x 90% = $4,780,800 Exercise 1-12A a. The $9,000,000 of research and development cost is an upstream cost while packaging, shipping, and sales commissions are downstream costs. b.
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Chapter_1HWKSol - Chapter 1 - Management Accounting and...

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