Davison Corporation, which has only one product, has provided the following data

Question

Davison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 95 Units in beginning inventory Units produced Units sold Units in ending inventory 5,000 4,900 100 Variable costs per unit: $26 $ 40 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense $ 4 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense $40,000 $73,500 What is the total period cost for the month under variable costing?

Explanation / Answer

Period cost: Fixed manufacturing overhead $          40,000 Fixed selling and administrative expense              73,500 $        113,500 Correct answer is $133,500

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