Answer:
Product Cost = $35,000
Period Cost = $101,000
Explanation:
Given
Sales $76,500
Direct materials used 7,300 Depreciation on factory equipment 4,700
Indirect labor 5,900
Direct labor 10,500
Factory rent 4,200
Factory utilities 1,200
Sales salaries expense 15,600
Office salaries expense 8,900 Indirect materials 1,200
Product cost refers to the costs incurred to create a product.
From the given data; the product cost will be calculated by the summation of the following:
Direct materials used 7,300 Depreciation on factory equipment 4,700
Indirect labor 5,900
Direct labor 10,500
Factory rent 4,200
Factory utilities 1,200
Indirect materials 1,200
So, Product Cost = 7,300 + 4,700 + 5,900 + 10,500 + 4,200 + 1,200 + 1,200
Product Cost = $35,000
Period Cost is any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets.
From the given data; the period cost will be calculated by the summation of the following:
Sales $76,500
Sales salaries expense 15,600
Office salaries expense 8,900
Period Cost = $76,500 + $15,600 + $8,900
Period Cost = $101,000
