Question

Average Cost per Unit $7.00 4.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense 1.56e s 5.e0 $3.50 $ 2.5e $1.0e 6.50 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 20,000 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units? 4 For financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units? . Total amount of product costs 2. Total amount of period costs incurred 3 Total amount of product costs 4. Total amount of period costs

Answer 1

the product cost includes direct material,direct labour and manufacturing overhead since these are the nacessary costs of manufacturing the product and the period costs are not a nacessary part of the manufacturing process like selling expenses.