Question

A review of the accounting records of Camtasia Manufacturing indicated that the company incurred
the following costs during the month of May.
Assume that the company's financial statements are prepared as per US GAAP.
Salary of the company president						$31,800
Salary of the vice president of manufacturing						$16,000
Salary of the chief financial officer						$18,600
Salary of the vice president of marketing						$14,900
Salaries of middle managers in manufacturing function						$205,000
Wages of production workers						$945,000
Salaries of middle managers in marketing and administration						$106,000
Salaries of engineers in maitainting production equipment						$171,000
Commissions paid to sales staff						$256,000
# of units produced in the month of May						3,200
# of units sold in the month of May						2,720
Assume that the beginning inventory for May is zero.
Required:
(A) What amount of payroll cost would be classified as SG&A expense in the income statement for May?
(B) What amount of payroll cost would be included in the cost of goods sold reported in the income statement for May?
Fill in the answers in the respective answer boxes below. TYPE only the number and DO NOT type $ sign or any text.
Do not round off intermediate calculations. Round up the final answers to the nearest dollar.
Payroll cost included in SG&A cost for May Income Statement
Payroll cost included in cost of goods sold for May Income Statement

Answer 1

Answer-Payroll costs that would be classified as selling, general, and administrative expense include the following:

Salary of the company president $31,800
Salary of the CFO $18,600
Salary of the VP of marketing $14,900
Salaries of administrative secretaries $106,000
Commissions paid to sales staff $256,000
Total $427,300

Payroll costs that would be classified as product cost include the following:

Salary of the VP of manufacturing $16,000
Salary of middle managers in manufac. plant $205,000
Wages of production workers $945,000
Salaries of engineers and maintenance crew $171,000
Total $1,337,000

Payroll to be included in cost of goods sold=1,337,000*2,720/3,200=1,136,450