Question

Use the following information for questions

# of units produced	6,600
Variable Costs per Unit:
Direct Materials	$46
Direct Labor	$16
Variable Manufacturing Overhead	$8
Variable Selling & Admin. Expense	$4
Fixed Costs per year:
Fixed Manufacturing Overhead	$234,300
Fixed Selling & Admin	$161,700

The Absorption Costing Unit Product Cost is:

Group of answer choices

$100.20

$105.50

$74

$70

The Variable Costing Unit Product Cost is:

Group of answer choices

$70

$74

$105.50

$100.20

If 6,000 units are sold during the period, total period cost under variable costing would be:

Group of answer choices

$188,100

$396,000

$422,400

$420,000

If 6,000 units are sold during the period, total period cost under absorption costing would be:

Group of answer choices

$188,100

$185,700

$234,300

$422,400

If 6,000 units are sold during the period, net income under the absorption costing approach will be:

Group of answer choices

$15,750 lower than net income under the variable costing approach

$15,750 higher than net income under the variable costing approach

$21,300 higher than net income under the variable costing approach

$21,300 lower than net income under the variable costing approach

Answer 1

Answer of Part 1: The correct answer is $105.50

Unit Product Cost = Direct Material + Direct Labor + Variable Manufacturing Overhead + Fixed manufacturing Overhead
Unit Product Cost = $46 + $16 + $8 + ($234,300 / 6,600)
Unit Product Cost = $46 + $16+ $8 + $35.5
Unit Product Cost = $105.50

Answer of Part 2: The correct answer is $70

Unit Product Cost = Direct Material + Direct Labor + Variable Manufacturing Overhead
Unit Product Cost = $46 + $16 + $8
Unit Product Cost = $70

Answer of Part 3: The correct answer is $420,000

Period cost = Fixed manufacturing overhead + Variable selling and administrative expenses per unit * Units sold + Fixed selling and administrative expenses
Period cost = $234,300 + $4 * 6,000 + $161,700
Period cost = $420,000

Answer of Part 4: The correct answer is $185,700

Period cost = Variable selling and administrative expenses per unit * Units sold + Fixed selling and administrative expenses
Period cost = $4 * 6,000 + $161,700
Period cost = $185,700