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30 May, 02:20

Direct materials $ 74,000 Direct labor $ 37,500 Variable manufacturing overhead $ 17,000 Fixed manufacturing overhead 29,500 Total manufacturing overhead $ 46,500 Variable selling expense $ 13,000 Fixed selling expense 20,000 Total selling expense $ 33,000 Variable administrative expense $ 4,500 Fixed administrative expense 26,000 Total administrative expense $ 30,500 Required: 1. With respect to cost classifications for preparing financial statements: a. What is the total product cost? b. What is the total period cost?

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  1. 30 May, 03:12
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    Instructions are listed below

    Explanation:

    Giving the following information:

    Direct materials $ 74,000

    Direct labor $ 37,500

    Variable manufacturing overhead $ 17,000

    Fixed manufacturing overhead 29,500

    Total manufacturing overhead $ 46,500

    Variable selling expense $ 13,000

    Fixed selling expense 20,000

    Total selling expense $ 33,000

    Variable administrative expense $ 4,500

    Fixed administrative expense 26,000

    Total administrative expense $ 30,500

    - Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.

    - Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.

    Period costs = total selling expense + total administrative expense

    Period costs = 33000 + 30500 = $63,500

    Product costs = direct materials + direct labor + MOH

    Product costs = 74,000 + 37,500 + 46,500 = $158,000
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