Lorraine Corp. obtained the following information from its absorption costing accounting records:
The total Period Costs incurred this period equals:
A) $15,000
B) $20,000
C) $48,000
D) $10,000

Question

Lorraine Corp. obtained the following information from its absorption costing accounting records:
 The total Period Costs incurred this period equals:
A) $15,000 
B) $20,000 
C) $48,000 
D) $10,000

Quizplus · Accepted Answer

Because there were no beginning or ending Work-in-Process or Finished Goods Inventories, the total product costs of $16,000 also equals total cost of goods sold.
Sales ($50,000) - Cost of Goods Sold ($16,000) - Operating Income ($24,000)
= Period Costs ($10,000)