Question

Hadley Corporation, which has only one product, has provided the following data concerning its most recent...

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

Selling price $ 187
Units in beginning inventory 100
Units produced 1,470
Units sold 1,220
Units in ending inventory 350
Variable costs per unit:
Direct materials $ 87
Direct labor $ 33
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 8
Fixed costs:
Fixed manufacturing overhead $ 17,640
Fixed selling and administrative expense $ 28,060

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

Multiple Choice

  • $37,820

  • $17,640

  • $45,700

  • $55,460

Homework Answers

Answer #1

The total period cost for the month under variable costing is calculated below:

a) Total fixed Cost = Fixed manufacturing overhead + Fixed selling and administrative expense

= $17,640 + $28,060

= $45,700

Total fixed Cost = $45,700

b) Variable selling and administrative expense = Units Sold * Variable selling and administrative expense per unit

= 1,220 Units* $8

= $9.760

Variable selling and administrative expense = $9,760

The total period cost for the month under variable costing =Total fixed Cost + Variable selling and administrative expense.

The total period cost for the month under variable costing = $45,700 + $9,760

= $55,460

The total period cost for the month under variable costing = $55,460

So correct answer is option(4) or $55,460

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