Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs: $\begin{array}{lrr}
\text { Rent on manufacturing facility} &\$250,000\
\text { Office manager's salary } &150,000\
\text { Wages of factory machine operator's } &110,000\
\text {Depreciation on manufacturing equipment } &50,000\
\text { Insurance and taxes on selling and administrative offices} &30,000\
\text {Direct materials purchased and used } &170,000\
\end{array}$

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: $\begin{array}{lrr}
  \text {  Rent on manufacturing facility} &\$250,000\
 \text { Office manager's salary } &150,000\
 \text { Wages of factory machine operator's } &110,000\
 \text {Depreciation on manufacturing equipment  } &50,000\
 \text {  Insurance and taxes on selling and administrative offices} &30,000\
 \text {Direct materials purchased and used  } &170,000\
\end{array}$

Wages paid to factory machine operators in producing the dog houses should be categorized as:

Quizplus · Accepted Answer

Wages paid to factory machine operators are directly related to the production of the dog houses and are therefore a direct cost of producing the product. As a result, these wages should be treated as a product cost and recorded in the inventory account until the product is sold.

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