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.
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