Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs: $\begin{array}{lrr}
\text {Rent on manufacturing facility } &\$250,000\
\text { Office manager's salar'y } &150,000\
\text { Wages of factory machine operator's} &110,000\
\text {Depreciation on manufacturing equipment } &50,000\
\text { Insurance and taxes on selling and administrative offices } &30,000\
\text { Direct materials purchased and used } &170,000\
\end{array}$
Based on the above information,the amount of period costs shown on Steuben's income statement is:

Question

Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs: $\begin{array}{lrr}
  \text {Rent on manufacturing facility  } &\$250,000\
 \text { Office manager's salar'y } &150,000\
 \text {  Wages of factory machine operator's} &110,000\
 \text {Depreciation on manufacturing equipment } &50,000\
 \text { Insurance and taxes on selling and administrative offices } &30,000\
 \text { Direct materials purchased and used } &170,000\
\end{array}$
 Based on the above information,the amount of period costs shown on Steuben's income statement is:

Quizplus · Accepted Answer

Period costs are the costs that are not directly involved in the production process but are necessary to run the business. In this case, the period costs are the selling and administrative expenses, which include selling expenses of $50,000 and administrative expenses of $130,000. Therefore, the total period costs incurred by Steuben Company during the year are $50,000 + $130,000 = $180,000. Thus, option D is the correct choice.

Steuben Company Produces Dog Houses Based on the Above Information,the Amount of Period Costs Shown