My company’s relevant range of production is 27,000 to 29,000 units. When it produces and sells 28,000 units, its average costs per unit are as follows: Average Cost per UnitDirect materials$ 8.70Direct labor$ 5.70Variable manufacturing overhead$ 3.20Fixed manufacturing overhead$ 6.70Fixed selling expense$ 5.20Fixed administrative expense$ 4.20Sales commissions$ 2.70Variable administrative expense$ 2.20For financial accounting purposes, what is the total product cost incurred to make 29,000 units?For financial accounting purposes, what is the total period cost incurred to sell 27,000 units?

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Answered: My company’s relevant range of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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My company’s relevant range of production is 27,000 to 29,000 units. When it produces and sells 28,000 units, its average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$ 8.70
Direct labor	$ 5.70
Variable manufacturing overhead	$ 3.20
Fixed manufacturing overhead	$ 6.70
Fixed selling expense	$ 5.20
Fixed administrative expense	$ 4.20
Sales commissions	$ 2.70
Variable administrative expense	$ 2.20

For financial accounting purposes, what is the total product cost incurred to make 29,000 units?
For financial accounting purposes, what is the total period cost incurred to sell 27,000 units?

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