Question

hadlock company, which has only one product has provided the following data concerning its month of operations. what is the total period cost for the month under the variable costing approach g

Answer 1

Answer:

Part 1

C. $176,800

Part 2

A. $15.200

Explanation:

Hi, I have attached the full question as image below

Under the Variable Costing System, the Period Cost is the Sum of the Non Manufacturing Costs and Fixed Manufacturing Overheads.

Period Cost = Non Manufacturing Costs + Fixed Manufacturing Overheads

where,

Non Manufacturing Costs = $57,600 + $8 × 6,400 = $108,800

Fixed Manufacturing Overheads = $68,000

therefore,

Period Cost = $176,800

Variable Costing Income Statement

Sales (6,400 x $91)                                                                          $582,400

Less Cost of Sales

Opening Finished Inventory                                             $0

Add Cost of Goods Manufactured (6,800 x $61)      $414,800

Closing Finished Inventory (400 x $61)                     ($24,400)  ($390,400)

Contribution                                                                                     $192,000

Less Period Costs                                                                           ($176,800)

Net Income                                                                                        $15,200

Workings :

Product Cost = Direct Materials + Direct labor + Variable manufacturing overhead

                      = $39 + $18 + $4

                      = $61