The accounting records of Georgia Company revealed the following costs: direct materials used,$250,000;direct labor,$425,000;manufacturing overhead,$375,000;and selling and administrative expenses,$220,000.Georgia's product costs total:
A)$1,050,000.
B)$830,000.
C)$895,000.
D)$1,270,000.
E)some other amount.

Question

Quizplus · Accepted Answer

Product costs include direct materials, direct labor, and manufacturing overhead. 
Total product costs = $250,000 + $425,000 + $375,000 = $1,050,000. 
Selling and administrative expenses are not considered product costs as they are not directly involved in production.

The Accounting Records of Georgia Company Revealed the Following Costs