Yesterday ABC Corporation reports costs for the year as follows: Direct Material
ID: 2393692 • Letter: Y
Question
Yesterday ABC Corporation reports costs for the year as follows: Direct Materials Used $780,000 Wages to Line Workers 245,000 Office Rent 33,000 Indirect Materials Used 800,000 How much is the total product costs for the year? Explain your answers. 6Reply Miranda Conidaris Yesterday Direct Cost is an exact pricing when it comes to materials, labor, supplies, etc. needed for the job. While indirect cost is overhead expenses such as supervisio wages. insurance cost depreciation etc AleonN duk Ono DoulerDe·nt itExplanation / Answer
Total Product Cost = Direct Materials Used + Wages to Line Workers + Indirect materials used
= $780,000+$245,000+$800,000
=$1,825,000
Total product cost for the year is $1,825,000
Explanation :-
Product costs are costs incurred in manufacturing a product. They usually consist of Direct materials, direct labor and manufacturing overheads.
Period costs are costs which are not manufacturing costs and they cannot be assigned to products.
Here, the cost of Office Rent falls under the period cost category and not included in calculating the total product costs for the year
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