West Co.'s manufacturing costs for the period just ended were as follows:
Direct materials and direct labor $600,000
Other variable manufacturing costs 100,000
Depreciation of factory building 50,000
Depreciation of factory equipment 40,000
Depreciation of warehouse used to store finished inventory 28,000
What amount should be considered product cost for external reporting purposes?
A. $700,000
B. $790,000
C. $818,000
D. $690,000
**DO NOT TELL me the answer, I do not want to get flagged for this BS..
Help me understand and that way I will get to the answer.
Question..
Do I just add, (Direct materials and direct labor $600,000 + Other variable manufacturing costs 100,000) = 700,000? Or do I need to add more to get to the amount of product cost for external reporting?