Question

A particular patient Cost of a sles vocue alminstered an tatient elinie at a hospital Cost of electonic navigation syatem installed in ayacht mamafaurer 10 Wood used to s home A particular yacht A particular heme Required nem ubove, indicate whether the cost is direct or indirest with respect to the cost object listed next to it Pat your answers in the colunn provided. (5 marks) C. A partial liating of costa incurred at Jala Enterprise during January appears below RM 107,000 11,000 35,000 115,000 Direct materials Uulities, factory Sales commissions Administrative salaries Indirect labor Advertising Depreciation of production equipment 29,000 148,000 46,000 109,000 39,000 140,000 Direct labor Depreciation of administrative equipment Director's remuneration Required: Compute the total amount of product cost listed above. a) (3 marks Determine the total amount of period cost listed above. b) mark

Answer 1

Product cost is that cost which is attributable to product and is a part of cost of manufacturing and therefore can be regarded as inventory value cost. On the other hand period cost is opposite to product cost and therefore it is not related to cost of product and thus is not included as a part of inventory value. 34 35 36 a) Product Cost Direct Materials Utilities Factory Indirect Labor Depreciation of Production Equipment Direct Labor Total Product Cost 107,000 11,000 29,000 46,000 109,000 302,000 43 44 45 b) Period Cost AO Sales Commissions Adminstrative Salaries Advertising Depreciation of Adminstrative Equipment Director's Remuneration Total Period Cost 35,000 115,000 148,000 39,000 140,000 477,000