Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations

Selling price $ 106

Units in beginning inventory 0

Units produced 2,600

Units sold 2,200

Units in ending inventory 400

Variable costs per unit:

Direct materials $46

Direct labor $28

Variable manufacturing overhead $2

Variable selling and administrative expense $7

Fixed costs:

Fixed manufacturing overhead $33,800

Fixed selling and administrative expense $8,800

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

a) $42,600

b) $33,800

c) $24,200

d) $58,000

Question

Milo Montgomery

Business

10 August, 10:08

Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations

Selling price $ 106

Units in beginning inventory 0

Units produced 2,600

Units sold 2,200

Units in ending inventory 400

Variable costs per unit:

Direct materials $46

Direct labor $28

Variable manufacturing overhead $2

Variable selling and administrative expense $7

Fixed costs:

Fixed manufacturing overhead $33,800

Fixed selling and administrative expense $8,800

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

a) $42,600

b) $33,800

c) $24,200

d) $58,000

+1

Answers (1)

Know the Answer?

Babykins · Answer 1

c) $ 24,200

Explanation:

Computation of Total Period costs

Fixed selling and Administrative expenses $ 8,800

Variable Selling and Administrative costs

$ 7 per unit * 2,200 units sold $ 15,400

Total period costs $ 24,200

The fixed manufacturing overhead is part of manufacturing costs so not considered.

The variable selling and administrative costs are based on units sold and not units produced.