Accounting Question

Q1. Montana Company produces basketballs. It incurred the following costs during the year.

Direct materials $14,509

Direct labor $25,625

Fixed manufacturing overhead $10,440

Variable manufacturing overhead $32,425

Selling costs $21,365

What are the total product costs for the company under variable costing? Total product costs $

 

Q2.

On December 1, Diaz Company introduces a new product that includes a one-year warranty on parts. In December, 1,000 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $80 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.