Selling and administrative expenses are considered to be: A product cost under v

Question

Selling and administrative expenses are considered to be: A product cost under variable costing, a product cost under absorption costing. part of fixed manufacturing overhead under variable costing. A period cost under variable costing. manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the variable costing unit product cost for the month $ 103 $ 99 $ 94 $ 90 Coffee klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. Determine the sales dollars that must be generated to attain target profits of S2.500 per month. 2,550 5,013 8,458 10,555

Explanation / Answer

12 . Solution is D period cost under variable costing

13. Product cost under variable costing

Direct material $46

Direct Labor $41

Variable manufacturing overhead $3

Product cost $90

So the answer is D

14. Com ratio = contribution / sales = (1.49 -.36 ) / 1.49 = .7583

Sales in dollars = Target profit + fixed expense / CM ratio

Sales in dollars = $2,500 + $ 1300 / .7583 = $5,013

So the solution is B

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