2.) A manufacturing company that produces a single product has provided the foll

Question

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

  Selling price

$126

  Units in beginning inventory

0

  Units produced

2,630

  Units sold

2,500

  Units in ending inventory

130

  Variable costs per unit:

  Direct materials

$49

  Direct labor

$17

  Variable manufacturing overhead

$8

  Variable selling and administrative

$9

  Fixed costs:

  Fixed manufacturing overhead

$84,160

  Fixed selling and administrative expenses

$17,500

The total gross margin for the month under absorption costing is:

$50,000

$10,000

$96,700

$107,500

3.) Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

  Selling price

$136

  Units in beginning inventory

0

  Units produced

1,870

  Units sold

820

  Units in ending inventory

1,050

  Variable costs per unit:

  Direct materials

$43

  Direct labor

$34

  Variable manufacturing overhead

$12

  Variable selling and administrative

$11

  Fixed costs:

  Fixed manufacturing overhead

$14,960

  Fixed selling and administrative

$21,320

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

$45,300

$30,340

$36,280

$14,960

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

Explanation / Answer

2. Absorption costing:

Unit cost=direct material+direct labour+variable manufacturing overhead+fixed manufacturing overhead

=49+17+8+(84160/2630)

=$106 per unit

Option A is correct=$50000

3.

Variable costing:

Total period cost=fixed manufacturing overhead+variable manufacturing overhead+variable selling&administration

=14960+21320+(820×11)

=$45300

Correct option is a=$45300

Sales(2500×126) 315000 Less cost of good sold: Beginning inventory 0 Add cost of good manufactured(2630×106) 278780 Goods available for sale 278780 Less ending inventory(130×106) 13780 265000 Gross margin 50000

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