Question

Steele Company produces dog houses. During 2013, Steele 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 Steele‘s 12/31/2013 income statement is:

Answer 1

$224,000

Step-by-step explanation:

Cost incurred on periodic basis. It is incurred in each period mostly on fixed basis. It includes the Rent, admin, depreciation, office supplies etc.

Period cost = Rent on manufacturing facility +Office manager's salary + Insurance and taxes on selling and administrative offices

Period cost = $128,000 + $78,000 + $18,000

Period cost = $224,000