Homework SourseSchwiesow Corporation has provided the following information
Schwiesow Corporation has provided the following information:
For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:
Multiple Choice
$72,000
$61,000
$11,000
$77,000
| Cost per Unit | Cost per Period | |||
| Direct materials | $ | 7.05 | ||
| Direct labor | $ | 3.50 | ||
| Variable manufacturing overhead | $ | 1.65 | ||
| Fixed manufacturing overhead | $ | 11,000 | ||
| Sales commissions | $ | 1.00 | ||
| Variable administrative expense | $ | 0.40 | ||
| Fixed selling and administrative expense | $ | 5,500 | ||
Solution
A. $72,000
Variable manufacturing cost per unit = Direct materials + Direct labor + Variable manufacturing overhead = $7.05 + $3.50 + $1.65 = $12.20
| Total variable manufacturing cost($12.20 per unit x 5,000 units produced) | $61,000 |
| Total fixed manufacturing overhead cost | $11,000 |
| Total product (manufacturing) cost | $72,000 |
