Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price $ 165 Units in beginning inventory 0 Units produced 12,700 Units sold 12,000 Units in ending inventory 700 Variable costs per unit: Direct materials $ 53 Direct labor $ 48 Variable manufacturing overhead $ 6 Variable selling and administrative expense $ 4 Fixed costs: Fixed manufacturing overhead $ 406,400 Fixed selling and administrative expense $ 216,000 What is the total period cost for the month under variable costing

Answer 1

Answer: $670,400

Explanation:

Period costs are not included in direct production and in this instance include:

• Variable selling and administrative expense

• Fixed manufacturing overhead

• Fixed selling and administrative expense

Period costs = (12,000 * 4) + 406,400 + 216,000

= $670,400