The accounting records of Niagara Manufacturing Company revealed the following costs: direct materials used, $120,000; direct labour, $275,000; manufacturing overhead, $350,000; and selling and administrative expenses, $400,000. Niagara's product costs total:
A)$395,000.
B)$400,000.
C)$625,000.
D)$745,000.
E)$1,145,000.

Question

Quizplus · Accepted Answer

Product costs include direct materials, direct labor, and manufacturing overhead. Therefore, the total product costs are $120,000 (direct materials) + $275,000 (direct labor) + $350,000 (manufacturing overhead) = $745,000.

The Accounting Records of Niagara Manufacturing Company Revealed the Following