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—$32,000.
2.	Salary of the vice president of manufacturing—$15,600.
3.	Salary of the chief financial officer—$19,700.
4.	Salary of the vice president of marketing—$15,200.
5.	Salaries of middle managers (department heads, production supervisors) in manufacturing plant—$189,000.
6.	Wages of production workers—$938,000.
7.	Salaries of administrative secretaries—$110,000.
8.	Salaries of engineers and other personnel responsible for maintaining production equipment—$180,000.
9.	Commissions paid to sales staff—$246,000.

Required:
a.	What amount of payroll cost would be classified as selling, general, and administrative expense?

b.	Assuming that Spiller made 3,400 units of product and sold 2,550 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.)

Answer 1

a ) payroll cost classified as selling , general , administrative expense

Expenses	Amount
salary of company president	32000
salary of cheif financial officers	19700
salary of vice president of marketing	15200
salary of administrative secretaries	110000
commission paid to sales staff	246000
total payroll cost	422900

b ) amount of payroll that would be include in COGS

expenses	amount
salary of vice president of manufacturing	15600
salary of middle manager in manufacturing plant	189000
wages of production workers	938000
salary of engineers and other personal	180000
total payroll cost	1322600