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Steele Company produces dog houses. During 2013, Steele Company incurred the following costs: Rent on manufacturing facility $125,000 Office manager’s salary $75,000 Wages of factory machine operators $55,000 Depreciation on manufacturing equipment $25,000 Insurance and taxes on selling and administrative offices $15,000 Direct materials purchased and used $85,000 Based on the above information, the amount of period costs shown on Steele‘s 12/31/2013 income statement is: $90,000 $215,000 $15,000 $75,000
Expert Answer
Period costs are general and administrative expenses,like rent, office depreciation, office supplies, and utilities.
The amount of period costs shown on Steele‘s 12/31/2013 income statement=Rent on manufacturing facility +Office manager’s salary + Insurance and taxes on selling and administrative offices
=$125,000+$75,000+$15,000
=$215,000.
So the option is B.$215,000.
