Question

last oneee i think

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price	$	163
Units in beginning inventory		0
Units produced		10,600
Units sold		9,800
Units in ending inventory		800
Variable costs per unit:
Direct materials	$	52
Direct labor	$	47
Variable manufacturing overhead	$	11
Variable selling and administrative expense	$	9
Fixed costs:
Fixed manufacturing overhead	$	318,000
Fixed selling and administrative expense	$	107,800

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

Multiple Choice

$514,000

$196,000

$425,800

Answer 1

• Under Variable Costing, Period cost consist of:

--Selling & Administrative expenses (both variable and fixed), and

--Fixed manufacturing Overhead

• Answer

A	Variable Selling & Admin	$                       9.00
B	Units sold	9,800
C = A x B	Total Variable Selling & Admin expenses	$            88,200.00
D	Fixed Selling & Admin expense	$          107,800.00
E	Fixed manufacturing overhead	$          318,000.00
F = C+D+E	TOTAL PERIOD COST under Variable costing	$          514,000.00 = Answer

• Correct Answer = Option #1: $ 514,000