department to be as shown in the following table. Department Research and development Manufacturing Selling and administrative Total Square Footage Required 10,000 60,000 30,000 100,000 6. Paid $834,000 for wages of production workers. 7. Paid cash of $645,000 for salaries of administrative personnel. There was $17,000 of accrued salaries owed to administrative personnel at the end of Year 1. There was no beginning balance in the Salaries Payable account for administrative personnel. 8. Purchased manufacturing equipment two years ago at a cost of $14,400,000. The equipment had an eight-year useful life and a $2,880,000 salvage value. 9. Paid $396,000 cash to engineers in the product design department. 10. Paid a $206,000 cash dividend to owners. 11. Paid $72,000 to set up manufacturing equipment for production. 12. Paid a one-time $196,000 restructuring cost to redesign the production process to implement a just-in-time inventory system. 13. Prepaid the premium on a new insurance policy covering nonmanufacturing employees. The policy cost $64.800 and had a one-year term with an effective starting date of May 1. Four employees work in the research and development department and eight employees work in the selling and administrative department. Assume a December 31 closing date. 14. Made 76,700 units of product and sold 69,900 units at a price of $76 each. 0-1. Identify the items that are classified as product costs and determine the amount of cost of goods sold reported on the Year 1 income statement. e-2. Identify the items that are classified as upstream costs and determine the amount of upstream cost expensed on the Year 1 income statement. Hel