Answer:
b.$20,550
Explanation:
The period costs are those costs which include costs for a particular period. The calculation for these costs differ under the two methods absorption and variable. Under absorption Costing the Period costs include Variable selling and administrative + Fixed selling and administrative expenses.
<u>Lagle Corporation</u>
<u>Absorption Costing</u>
Direct materials $ 4.75
* 7000= $ 33250
Direct labor $ 3.70 * 7000= $ 25900
Variable manufacturing overhead $ 1.45 * 7000= $ 10150
Fixed manufacturing overhead $ 18,200
Total Product costs $ 87,500
Sales commissions $ 1.70 * 7000=$ 11900
Variable administrative expense $ 0.55 * 7000= $ 3850
Fixed selling and administrative expense $ 4,800
Total Period Costs $ 20550
<u><em>Mostly Absorption costing is used for daily basis. Therefore Choice b is the best option</em></u><em>. </em>
Under variable costing the Period costs include Fixed manufacturing overheads + Fixed selling and administrative expenses.
<u>Lagle Corporation</u>
<em>Variable Costing</em>
Direct materials $ 4.75
* 7000= $ 33250
Direct labor $ 3.70 * 7000= $ 25900
Variable manufacturing overhead $ 1.45 * 7000= $ 10150
Sales commissions $ 1.70 * 7000=$ 11900
Variable administrative expense $ 0.55 * 7000= $ 3850
<em>Total Product costs $ 85,050</em>
Fixed selling and administrative expense $ 4,800
Fixed manufacturing overhead $ 18,200
<em>Total Period Costs $ 23000</em>
