Question

A partial listing of costs incurred at ABC Corporation during September appears below: Direct materials $ 113,000 Utilities, factory $ 5,000 Administrative salaries $ 81,000 Factory supervisor salary $ 25,000 Selling expense $ 48,000 Depreciation of factory equipment $ 20,000 Depreciation of administrative equipment $ 30,000 Direct labor $ 129,000 Advertising $ 135,000 The total period costs listed above for September is:

Answer 1

Answer:

The total period costs listed above for September is $294,000

Explanation:

Period cost is that cost which is used to promote and sell the product. Like : selling expenses, advertising expenses. It is not shown in balance sheet. It is always shown debit side of  profit in loss accounts

The cost which is not capitalized is called period cost.

So,

Total product costs = Administrative salaries + Selling expense +  Depreciation of administrative equipment + Advertising.

= $ 81,000 +  $ 48,000 + $ 30,000  + $ 135,000

= $294,000

Thus, The total period costs listed above for September is $294,000