Rogue Distribution Inc.estimates the following expenditures: interest paid of $27,500; wages paid to workers of $94,600; overhead costs of $22,300; raw materials of $35,000; shipping costs of $8,100 and dividends paid to common stockholders of $15,000.What are the total production costs?
A)$149,000
B)$160,000
C)$166,500
D)$187,500

Question

Quizplus · Accepted Answer

To calculate the total production costs, we need to add up all the expenditures that are directly related to the production process. These include wages paid to workers, raw materials, overhead costs and shipping costs. Therefore, the total production costs are: $94,600 + $35,000 + $22,300 + $8,100 = $160,000. The other expenditures such as interest paid and dividends paid to stockholders are not related to the production process, so they are not included in the total production costs.