[The following information applies to the questions displayed below.]
The following information has been taken from the perpetual inventory system of Imperial Mfg.Co.for the month ended September 30:

-Alton Company produces metal belts.During the current month,the company incurred the following product costs: Raw materials $100,000;
Direct labor $75,000;
Electricity used in the Factory $25,000;
Factory foreperson salary $3,750;and
Maintenance of factory machinery $2,000.
Alton Company's direct product costs totaled:

Question

[The following information applies to the questions displayed below.]
The following information has been taken from the perpetual inventory system of Imperial Mfg.Co.for the month ended September 30:
  
-Alton Company produces metal belts.During the current month,the company incurred the following product costs: Raw materials $100,000;
Direct labor $75,000;
Electricity used in the Factory $25,000;
Factory foreperson salary $3,750;and
Maintenance of factory machinery $2,000.
Alton Company's direct product costs totaled:

Quizplus · Accepted Answer

Direct product costs include the cost of raw materials and direct labor. In this case, the direct product costs would be $100,000 + $75,000 = $175,000. The other expenses (electricity, foreperson salary, maintenance) are considered indirect costs and would not be included as direct product costs.

[The Following Information Applies to the Questions Displayed Below