Rango Enterprises' Manufacturing Costs for 2014 Are as Follows What Amount Should Be Considered as Product Costs for External

question 84

Multiple Choice

Rango Enterprises' manufacturing costs for 2014 are as follows: $$\begin{array} { l r } \text { Direct materials } & \$ 65,000 \\\text { Direct labor } & 118,000 \\\text { Manufacturing supplies } & 9,000 \\\text { Depreciation of factory equipment } & 22,000 \\\text { Other fixed manufacturing overhead } & 43,000\end{array}$$ What amount should be considered as product costs for external reporting purposes?

• A) $183,000
• B) $192,000
• C) $257,000
• D) $248,000

---

Definitions:

Prepaid Rent Expense

An asset account that represents payments made for rent in advance of the rental period, which will be expensed over time as the rental period occurs.

Assets

Resources owned or controlled by a business, expected to produce future economic benefits.

Expenses

Costs incurred in the process of earning revenue; examples include rent, utilities, and salaries.

Prepaid Rent Expense

An advance payment for rent that is recorded as an asset on the balance sheet until it is consumed or the rental period elapses.