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

Selling price $ 121

Units in beginning inventory 0

Units produced 6,000

Units sold 5,600

Units in ending inventory 400

Variable costs per unit:

Direct materials $ 38

Direct labor $ 53

Variable manufacturing overhead $ 3

Variable selling and administrative expense $ 11

Fixed costs:

Fixed manufacturing overhead $ 60,000

Fixed selling and administrative expense $ 28,000

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

A) $149,600

B) $60,000

C) $88,000

D) $89,600

Question

Business

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18 November, 01:36

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

Selling price $ 121

Units in beginning inventory 0

Units produced 6,000

Units sold 5,600

Units in ending inventory 400

Variable costs per unit:

Direct materials $ 38

Direct labor $ 53

Variable manufacturing overhead $ 3

Variable selling and administrative expense $ 11

Fixed costs:

Fixed manufacturing overhead $ 60,000

Fixed selling and administrative expense $ 28,000

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

A) $149,600

B) $60,000

C) $88,000

D) $89,600

+1

Answers (1)

Know the Answer?

Selah Warren · Answer 1

C) $88,000

Explanation:

period cost: cost which cannot be capitalize through inventory or other assets.

Under variable cost, the fixed cost are treated as period cost.

Fixed costs:

Fixed manufacturing overhead $ 60,000

Fixed selling and administrative expense $ 28,000