Answer:
(1) The total amount of product costs is $79,430.
(2) The total amount of period costs is $37,300.
Explanation:
Note: There are two requirements in this question as follows:
(1) What is the total amount of product costs?
(2) What is the total amount of period costs?
These two are answered as follows:
(1) What is the total amount of product costs?
Product cost can be described as the expenses that are incurred in order to produce a product. These types of expenses are charged to cost of goods sold and include direct materials, direct labor, factory overhead, and consumable production supplies.
Therefore, the total amount of product costs of Choco Chocolata can be calculated as follows:
Choco Chocolata
Computation of Total Product Costs
<u>Details Amount ($) </u>
Utilities for the bakery 2,100
Paper used in packaging product 180
Salaries and wages in the bakery 23,500
Cookie ingredients 43,500
Bakery labor fringe benefits 1,300
Bakery equipment maintenance 800
Depreciation of bakery plant and equipment 2,200
Uniforms for bakers 750
Insurance for the bakery 900
Boxes, bags, and cups used in the bakery 1,100
Overtime premiums 2,600
Idle Time <u> 500 </u>
Total <u> 79,430 </u>
Therefore, the total amount of product costs is $79,430.
(2) What is the total amount of period costs?
Period costs are costs that are related to passage of time but cannot not be charged to the cost of goods sold.
Therefore, the total amount of period costs of Choco Chocolata can be calculated as follows:
Choco Chocolata
Computation of Total Period Costs
<u>Details Amount ($) </u>
Administrative costs 2,300
Rent for administration offices 18,500
Advertising 3,500
Office Manager's salary <u> 13,000 </u>
Total <u> 37,300 </u>
Therefore, the total amount of period costs is $37,300.
