A partial listing of costs incurred at Boylen Corporation during March appears below: Direct materials$181,000Utilities, factory$10,000Sales commissions$69,000Administrative salaries$99,000Indirect labor$32,000Advertising$75,000Depreciation of production equipment$28,000Direct labor$120,000Depreciation of administrative equipment$49,000Required:a. What is the total amount of product cost listed above? Show your work.b. What is the total amount of period cost listed above? Show your work.
What will be an ideal response?
a.
Product costs consist of direct materials, direct labor, and manufacturing overhead:
| Direct materials | $ | 181,000 | |||
| Direct labor | 120,000 | ||||
| Manufacturing overhead: | |||||
| Utilities, factory | $ | 10,000 | |||
| Indirect labor | 32,000 | ||||
| Depreciation of production equipment | 28,000 | 70,000 | |||
| Total product cost | $ | 371,000 |
b.
Period costs consist of all costs other than product costs:
| Sales commissions | $ | 69,000 |
| Administrative salaries | 99,000 | |
| Advertising | 75,000 | |
| Depreciation of administrative equipment | 49,000 | |
| Total period cost | $ | 292,000 |
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