Shu Corporation recently computed total product costs of $567,000 and total period costs of $420,000, excluding $35,000 of sales commissions that were overlooked by the company's administrative assistant. On the basis of this information, Shu's income statement should reveal operating expenses of:
A) $35,000.
B) $420,000.
C) $455,000.
D) $567,000.
E) $602,000.

Question

Quizplus · Accepted Answer

Operating expenses include both period costs and sales commissions. Therefore, the correct total is $420,000 (period costs) + $35,000 (overlooked sales commissions) = $455,000.

Shu Corporation Recently Computed Total Product Costs of $567,000 and Total