What is the total period cost for the month under variable costing?

The following information for the next 2 questions Davison Corporation, which has only one product , has provided the following data concerning its most recent month of operations: Selling price 95 ,Units in beginning inventory 0 ,Units produced 5000, Units sold 4,900, Units in ending inventory 100.

Variable costs per unit

Direct materials. 26 ,Direct labor 40 , Variable manufacturing overhead 1, Variable selling and administrative expense 4,

Fixed costs

Fixed manufacturing overhead $40,000, Fixed selling and administrative expense $73,500 What is the total period cost for the month under variable costing? A) S133,100 B) $113,500 C) $40,000 D) $93,100

Solutions

Expert Solution

Calculation of Total period cost for the month under variable costing

Given information in the problem

Variable Selling & Administrative expense = $4

Fixed Selling & Admininstrative Expenses = $73,500

units sold = 4,900

Total Period costs under variable costing = Variable selling & administrative expenses + Fixed Selling & Administrative Expenses

=$4 * 4,900 units + $73,500

=$19,600 + $73,500

=$93,100

option (d) $93,100 is the correct choice

balaji rao answered 2 years ago

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