Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs: $\begin{array}{c}
\begin{array}{|l|}
\hline \text { Rent on manufacturing facility}\
\hline \text { Office manager's salary}\
\hline \text { Wages of factory machine operators } \
\hline\text { Depreciation on manufacturing equipment } \
\hline \text { Insurance and taxes on selling and administrative offices } \
\hline\text { Direct materials purchased and used }\
\hline
\end{array}
\begin{array}{r|}
\hline\$ 250,000 \
\hline150,000 \
\hline110,000 \
\hline50,000 \
\hline30,000 \
\hline170,000\
\hline
\end{array}
\end{array}$
Wages paid to factory machine operators in producing the dog houses should be categorized as:

Question

Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs: $\begin{array}{c}
\begin{array}{|l|}
\hline \text { Rent on manufacturing facility}\
\hline \text { Office manager's salary}\
\hline \text { Wages of factory machine operators } \
\hline\text { Depreciation on manufacturing equipment } \
\hline \text { Insurance and taxes on selling and administrative offices }  \ 
\hline\text { Direct materials purchased and used }\ 
\hline
\end{array}
\begin{array}{r|}
\hline\$ 250,000 \
\hline150,000 \
\hline110,000 \
\hline50,000 \
\hline30,000 \
\hline170,000\
\hline
\end{array}
\end{array}$
 Wages paid to factory machine operators in producing the dog houses should be categorized as:

Quizplus · Accepted Answer

The wages paid to factory machine operators are direct labor costs incurred in producing the dog houses, making them a part of the product cost. Product costs are the costs that are incurred in the manufacturing process and are considered as an inventory asset until the product is sold. Therefore, the wages paid to factory machine operators should be categorized as a product cost and recorded in the inventory account.

Steuben Company Produces Dog Houses Wages Paid to Factory Machine Operators in Producing the Dog