Daryl Corporation reports costs for the year as follows: $$\begin{array} { | l | r | }
\hline \text { Direct Materials Used } & \$ 390,000 \
\hline \text { Wages to Line Workers } & 225,000 \
\hline \text { Office Rent } & 53,500 \
\hline \text { Indirect Materials Used } & 785,000 \
\hline
\end{array}$$
How much is the total product costs for the year?
A) $785,000
B) $1,400,000
C) $1,453,500
D) $615,000

Question

Daryl Corporation reports costs for the year as follows: $$\begin{array} { | l | r | } 
\hline \text { Direct Materials Used } & \$ 390,000 \
\hline \text { Wages to Line Workers } & 225,000 \
\hline \text { Office Rent } & 53,500 \
\hline \text { Indirect Materials Used } & 785,000 \
\hline
\end{array}$$ 
How much is the total product costs for the year?
A) $785,000
B) $1,400,000
C) $1,453,500
D) $615,000

Quizplus · Accepted Answer

Product costs include all costs necessary to acquire or manufacture a product. In this case, it includes Direct Materials Used ($390,000), Wages to Line Workers ($225,000), and Indirect Materials Used ($785,000). Adding these together gives $390,000 + $225,000 + $785,000 = $1,400,000. Office Rent is considered a period cost, not a product cost, and is not included in the calculation.

Daryl Corporation Reports Costs for the Year as Follows How Much Is the Total Product Costs for the Year