ABC Company recorded the following information related to their inventory accoun
ID: 2394191 • Letter: A
Question
ABC Company recorded the following information related to their inventory accounts for 2017: January 1, 2017 December 31, 2017 Direct materials 50,000 41,000 Work in process 22,000 37,000 Finished goods 38,000 35,000 ABC Company's accounting records for 2017 indicated the following costs had been incurred: Direct materials purchased ................... $124,000 Depreciation, office equipment ............... 40,000 Direct labor ................................. 97,000 Utilities..................................... 20,000 Sales commissions............................. 56,000 Indirect materials............................ 18,000 Depreciation, factory equipment .............. 27,000 Production supervisor's salary ............... 67,000 Advertising................................... 61,000 60% of the utilities relate to the factory while 40% of the utilities relate to the general office building. Calculate the total period costs incurred during 2017.
Explanation / Answer
the following is the calculation:
Period costs are those which are not directly related to production of goods.
utilities (20,000*40%) 8,000 depreciation, office equipment 40,000 sales commissions 56,000 advertising 61,000 total period costs 165,000