Question

A review of the accounting records of Rundle Manufacturing indicated that the company incurred the following payroll costs during the month of March. Assume the companies financial statements are prepared in accordance with GAAP 1. Salary of the company president-$31,600 2. Salary of the vice president of manufacturing-$15,200. 3. Salary of the chief financial officer-$17,800 4. Salary of the vice president of marketing-$14,800 5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant-$200,000. 6. Wages of production workers-$945,000. 7. Salaries of administrative secretaries-$109,000. 8. Salaries of engineers and other personnel responsible for maintaining production equipment-$171,000. 9. Commissions paid to sales staff-$256,000 Required What amount of payroll cost would be classified as SG&A expense? b. Assuming that Rundle made 3,200 units of product and sold 2,560 of them duing the month of March, determine the amount of payroll cost that would be included in cost of goods sold. (Do not round intermediate calculations.) a. Payroll cost to be i in SG&A cost Payroll cost to be included in cost of goods sold

Answer 1

a. Particulars Amount S31,600 $17,800 S14,800 S109,000 S256,000 S429,200 esident salary ief Financial Officer eting dministrative secretaries Sales staff otal SG&A articulars Amount $15,200 $200,000 $945,000 $171,000 S1,331.200 416 ice president ddle managers roduction wvorkerS ngineers otal production wages Per unit wage (S1,331,200/3200) ages for 2,560 units 416 $1,064,960