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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.