Question

Steuben Company produces dog houses. During the current year, Steuben Company incurred the following costs:

Rent on manufacturing facility $ 128,000
Office manager's salary 78,000
Wages of factory machine operators 58,000
Depreciation on manufacturing equipment 28,000
Insurance and taxes on selling and administrative offices 18,000
Direct materials purchased and used 88,000


Based on the above information, the amount of period costs shown on Steuben's income statement is:

Multiple Choice

$96,000


$78,000


$18,000


$224,000

Answer 1

The amount of period costs shown on Steuben's income statement is $96,000.

Step-by-step explanation:

To find the amount of period costs shown on Steuben's income statement, we need to identify which costs are period costs. Period costs are non-manufacturing costs that are not directly tied to the production of goods or services. They include selling and administrative expenses.

From the given information, the costs that are period costs are:

• Office manager's salary: $78,000
• Insurance and taxes on selling and administrative offices: $18,000

Therefore, the amount of period costs shown on Steuben's income statement is $96,000.