Question

A review of the accounting records of Jordan 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.

Salary of the company president—$31,300.

Salary of the vice president of manufacturing—$15,700.

Salary of the chief financial officer—$19,100.

Salary of the vice president of marketing—$16,000.

Salaries of middle managers (department heads, production supervisors) in manufacturing plant—$192,000.

Wages of production workers—$941,000.

Salaries of administrative secretaries—$103,000.

Salaries of engineers and other personnel responsible for maintaining production equipment—$177,000.

Commissions paid to sales staff—$259,000.

Required

What amount of payroll cost would be classified as SG&A expense?

Assuming that Jordan made 3,300 units of product and sold 2,805 of them during the month of March, determine the amount of payroll cost that would be included in cost of goods sold. (Do not round intermediate calculations.)

Answer 1

1
Salary of the company president	31300
Salary of the chief financial officer	19100
Salary of the vice president of marketing	16000
Salaries of administrative secretaries	103000
Commissions paid to sales staff	259000
Payroll classified as SG&A expense	428400
2
Salary of the vice president of manufacturing	15700
Salaries of middle managers	192000
Wages of production workers	941000
Salaries of engineers and other personnel	177000
Product cost	1325700
Amount of payroll cost that would be included in cost of goods sold = 1325700/3300*2805= $1126845