A manufacturing company has provided the following data concerning its most rece
ID: 2377990 • Letter: A
Question
A manufacturing company 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
4
Fixed costs:
Fixed manufacturing overhead
$133,000
Fixed selling and administrative
34,000
What is the total period cost for the month under the absorption costing approach?
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
4
Fixed costs:
Fixed manufacturing overhead
$133,000
Fixed selling and administrative
34,000
Explanation / Answer
Hi,
Please find the answer as follows:
Period Cost = Fixed Selling and Administrative Expenses + Variable Selling and Administrative Expenses = 34000 + 4*6800 = 61200
Option A (61200) is correct.
Thanks.
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