Rios Corporation reports costs for the year as follows: $$\begin{array} { | l | r | }
\hline \text { Direct Materials Used } & \$ 780,000 \
\hline \text { Wages to Line Workers } & 245,000 \
\hline \text { Office Rent } & 33,000 \
\hline \text { Indirect Materials Used } & 800,000 \
\hline
\end{array}$$ How much is the total product costs for the year?

Question

Rios Corporation reports costs for the year as follows: $$\begin{array} { | l | r | } 
\hline \text { Direct Materials Used } & \$ 780,000 \
\hline \text { Wages to Line Workers } & 245,000 \
\hline \text { Office Rent } & 33,000 \
\hline \text { Indirect Materials Used } & 800,000 \
\hline
\end{array}$$ How much is the total product costs for the year?

Quizplus · Accepted Answer

Total product costs include all costs involved in bringing a product to its current state. This includes Direct Materials Used ($780,000), Wages to Line Workers ($245,000), and Indirect Materials Used ($800,000). Adding these together gives $1,825,000. Office Rent is considered a period cost, not a product cost.

Rios Corporation Reports Costs for the Year as Follows How Much Is the Total Product Costs for the Year