A review of the accounting records of Spiller Manufacturing indicated that the c

Question

A review of the accounting records of Spiller Manufacturing indicated that the company incurred the following payroll costs during the month of September 1. Salary of the company president-$40,000 2. Salary of the vice president of manufacturing-$25,000. 3. Salary of the chief financial officer-$20,000 4. Salary of the vice president of marketing-$18,000 5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant -$196,000. 6. Wages of production workers-$938,000 7. Salaries of administrative secretaries-$60,000 8. Salaries of engineers and other personnel responsible for maintaining production equipment-$178,000. 9. Commissions paid to sales staff-$252,000 Required a. What amount of payroll cost would be classified as selling, general, and administrative expense? Payroll cost b. Assuming that Spiller made 4,000 units of product and sold 3,600 of them during the month of September, determine the amount of payroll cost that would be included in cost of goods sold. (Do not round intermediate calculations.) Payroll cost

Explanation / Answer

Answer a

Payroll Cost classified as selling , general , admiinstrative expense.

Answer b

Aount of Payroll that would be include in COGS

Note : Salaries are fixed in nature thus won't change with the number of products manufacture or sold  

Expenses Amount ($) Salary of company president 40,000 Salary of cheif financial officers 20,000 Salary of Vice president of marketing 18,000 Salary of administrative secretaries 60,000 Commissions paid to sales staff 252,000 Total Payroll cost $390,000

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