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19 January, 11:27

Novak Express reports the following costs and expenses in June 2017 for its delivery service. Indirect materials $7,000 Drivers' salaries $16,900 Depreciation on delivery equipment 12,000 Advertising 5,100 Dispatcher's salary 5,400 Delivery equipment repairs 450 Property taxes on office building 930 Office supplies 660 CEO's salary 12,500 Office utilities 1,050 Gas and oil for delivery trucks 2,900 Repairs on office equipment 270 Determine the total amount of (a) delivery service (product) costs and (b) period costs. (a) Delivery service (product) costs $ (b) Period costs $

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  1. 19 January, 11:31
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    Answer and Explanation:

    The computation is shown below:

    a. For delivery service product cost

    Indirect materials $7,000

    Depreciation on delivery equipment $12,000

    Dispatcher's salary $5,400

    Gas and oil for delivery trucks $2,900

    Drivers' salaries $16,900

    Delivery equipment repairs $450

    Total $44,650

    The product cost includes direct material, direct labor and factory overhead cost which are used to make the product

    b) Period costs:

    Property taxes on office building $930

    CEO's salary $12,500

    Advertising $5,100

    Office utilities $11,050

    Repairs on office equipment $270

    Total $29,850

    The period cost includes majorly part of the selling and admin expense and it also recorded those expenses which are incurred according to the passage of time
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