Question

Saks Unlimited's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows:

Average Cost per Unit
Direct materials	$ 5.40
Direct labor	$ 3.55
Variable manufacturing overhead	$ 1.70
Fixed manufacturing overhead	$ 3.00
Fixed selling expense	$ 0.60
Fixed administrative expense	$ 0.40
Sales commissions	$ 1.00
Variable administrative expense	$ 0.40

What is the total period cost

Answers:

$60,250

$53,250

$80,250

$68,250

Answer 1

Total period cost = 9600 dollars

Above answer is explained below in detail:

Period costs are costs incurred for selling, general and administrative expenses, sales commissions etc., Production costs such as materials, labor, manufacturing overhead are not included in period costs.

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