Prаirie Timber Ltd. mаnufаctures custоm wооd furniture and is reviewing its internal reporting for May. The production manager is trying to better understand how manufacturing performance is evaluated and has raised concerns about how certain costs are being classified. During the month, the company used $84,000 of wood directly in production. The factory supervisor earned a salary of $18,000, and depreciation on factory equipment totaled $12,000. In addition, the company paid $26,000 in commissions to its sales staff. The production manager argues that all costs connected to the factory environment should be treated as product costs, while the controller maintains that only costs directly tied to production should be included. If the controller’s classification is applied correctly, what total amount will be recorded as product costs for May?
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