If the total warehousing cost for the year amounts to $450,000, and 40 percent of the warehousing activity is associated with finished goods and 60 percent with direct materials, how much of the cost would be charged as a product cost?
A) $90,000
B) $180,000
C) $270,000
D) $450,000

Question

Quizplus · Accepted Answer

40% of the warehousing cost is associated with finished goods, which are product costs. Therefore, 40% of $450,000 = $180,000 would be charged as a product cost.

If the Total Warehousing Cost for the Year Amounts to $450,000