Question

Glew Corporation has provided the following information:

	Cost per Unit		Cost per Period
Direct materials	$	6.00
Direct labor	$	3.35
Variable manufacturing overhead	$	1.75
Fixed manufacturing overhead			$	8,800
Sales commissions	$	1.00
Variable administrative expense	$	0.40
Fixed selling and administrative expense			$	4,000

For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to:

Multiple Choice

$9,600

$6,400

$5,600

$4,000

Answer 1

For Financial reporting purposes, the total amount of period costs incurred to sell 4000 units is:

Sales Commission                                     $1.0
Var. admin expenses      $0.40
Var. selling and admin. expenses per unit     $1.40

Period Cost is :
Variable selling & admin. cost                  $5600    (4000*1.4)
Fixed selling & admin. cost                     $4000    
Total Period Cost of Selling                      $9600

Hence answer is a). $9,600