Question

Castillo​ Corporation, a​ manufacturer, reports costs for the year as​ follows: Direct Materials Used $ 375 comma 000 Wages to Line Workers 620 comma 000 Office Rent 29 comma 000 Indirect Materials Used 320 comma 000 How much is the total period costs for​ Castillo?

Answer 1

Period cost is Office rentals and Indirect material used

Step-by-step explanation:

The reason is that the office rentals are not associated with the production and has much more association with the time. The passage of time increases the rental cost which means it is a period cost. Likewise, the indirect material cost incurred is also not associated with the production and has more association with the period. Example includes the safety material used in the warehouse or cleaning material used in the accounting department or production department means that the expense is period related.

Total Period cost = $29,000 Office rentals + $320,000 Indirect material

Total Period cost = $349,000