Rios Corporation Reports Costs for the Year as Follows How Much Is the Total Product Costs for the Year

question 26

Multiple Choice

Rios Corporation reports costs for the year as follows: $\begin{array} { | l | r | } \hline \text { Direct Materials Used } & \$ 780,000 \\\hline \text { Wages to Line Workers } & 245,000 \\\hline \text { Office Rent } & 33,000 \\\hline \text { Indirect Materials Used } & 800,000 \\\hline\end{array}$ How much is the total product costs for the year?

• A) $800,000
• B) $1,825,000
• C) $1,858,000
• D) $1,025,000

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Definitions:

Variable Costs

Costs that change in proportion to the level of activities or volume of production in a business.

Fixed Costs

Expenses that do not fluctuate with changes in production level or sales volume.

Sales

Transactions between a seller and a buyer where the seller provides goods, services, or assets in exchange for money or other compensation.

Break-even Point

The point at which total cost and total revenue are equal, meaning no net loss or gain, and one has "broken even".