Doofenshmirtz Inc. incurs the following costs: $760 for factory workers salaries $690 for direct materials $1270 for commissions $270 for factory supervisor salaries $1050 for depreciation on office equipment at the CEO headquarters $110 for paying a factory accountant $80 for indirect materials. What is the total period cost?
Doofenshmirtz Inc. incurs the following costs: $760 for factory workers salaries $690 for direct materials $1270 for commissions $270 for factory supervisor salaries $1050 for depreciation on office equipment at the CEO headquarters $110 for paying a factory accountant $80 for indirect materials. What is the total period cost?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Doofenshmirtz Inc. incurs the following costs:
$760 for factory workers salaries
$690 for direct materials
$1270 for commissions
$270 for factory supervisor salaries
$1050 for
$110 for paying a factory accountant
$80 for indirect materials.
What is the total period cost?
Expert Solution
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Step 1
Period cost are those cost which are not incurred related to the production of goods. These cost are shown in the income statement in the year when they are incurred.
Example:
- Selling expense
- Marketing expense
- General and administrative expenses
- CEO salary
- Commission
- Depreciation on office equipment/buildings
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