Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price $ 133 Units in beginning inventory 0 Units produced 7,000 Units sold 6,800 Units in ending inventory 200 Variable costs per unit: Direct materials $ 41 Direct labor $ 57 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 4 Fixed costs: Fixed manufacturing overhead $ 133,000 Fixed selling and administrative expense $ 34,000 What is the total period cost for the month under absorption costing

Answer 1

Answer:

$61,200

Explanation:

The computation of the total period cost for the month under absorption costing is shown below:

= Fixed selling and administrative expense +  Variable selling and administrative expense rate × number of units sold

= $34,000 + 6,800 units × $4

= $34,000 + $27,200

= $61,200

As we know that the period cost includes the major part of the selling expenses and we applied the same for the above computation