Answer:
$510,130
Explanation:
Costs can be classified into two categories: Product Costs and Period Costs. Product costs are the manufacturing costs that are incurred in the production of goods and services. Under absorption costing, product costs include direct materials, direct labor, indirect materials, indirect labor, and other factory overhead. These costs are capitalized and expensed out when related goods and services are sold out.
On the other hand, period costs are selling & administrative expenses. These costs are never capitalized and expensed out in the statement of profit or loss as soon as incurred. Examples of period costs are advertisement expenses, depreciation expenses (not related to factory), sales commissions, administrative salaries and wages.
Calculation of Period Costs
Advertising costs $12,000
CEO's salary 460,000
Delivery vehicle depreciation 1,230
Administrative wages and salaries 36,900
Total Period Costs $510,130
Answer:
Total Period Cost $ 510,130
Explanation:
Period cost are those wich are not capitalzied through inventory as they aren't involve in the manufacturing process.
Therefore, direct material, direct labor and factory overhead concepts are excluded.
Advertising Costs 12,000
CEO's Salary 460,000
Delivery Vehicle Depreciation 1,230
Administrative Wages and Salaries 36,900
Total Period Cost 510,130
