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Absorption Costing for a Single Product

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

Selling price $100

Units in beginning inventory $0
Units produced $2,400
Units sold $2,100
Units in ending inventory $300

Variable cost per unit:
Direct materials $31
Direct labor $11
Variable manufacturing overhead $1
Variable selling and administrative $8

Fixed cost:
Fixed manufacturing overhead $79,200
Fixed selling and administrative $8,400

What is the total period cost for the month under the absorption costing approach?

a) $79,200
b) $8,400
c) $104,400
d) $25,200

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Solution Summary

The answer contains the computation of period cost under absorbtion costing.

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