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The Norfolk Company reported the following information at the end of the current year: Indirect labor $40,000 Direct materials $50,000 Selling expenses $15,000 Sales Revenue $200,000 Rent on factory $25,000 Factory utilities $10,000 Depreciation - factory $10,000 Direct labor $45,000 Administrative expenses $30,000 Property taxes on factory 5000 Calculate Norfolk Company’s period costs
The Norfolk Company reported the following information at the end of the current year: Indirect labor $40,000 Direct materials $50,000 Selling expenses $15,000 Sales Revenue $200,000 Rent on factory $25,000 Factory utilities $10,000 Depreciation - factory $10,000 Direct labor $45,000 Administrative expenses $30,000 Property taxes on factory 5000
Calculate Norfolk Company’s period costs.
Expert Solution
Answer
C .
Explanation
Computation of Norfolk's Company's Period Costs:
Period Costs = Selling Expenses + Administrative Expenses
= $15,000+$30,000
Period Costs = $45,000
Note:
Period costs are the costs that are not included in product cost, they are incurred after the production and includes selling expenses and administrative expenses of office etc., and does not contribute in the production of goods.
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