Question

Lasky Textiles Inc. produces and sells a decorative pillow. It has provided the following data concerning its most recent month of operations: Selling price $126 Units in beginning inventory - Units produced 8,700 Units sold 8,400 Units in ending inventory 300 Variable costs per unit Direct materials $30 Direct labor $48 Variable manufacturing overhead $3 Variable selling and administrative $7 Fixed costs: Fixed manufacturing overhead $156,600 Fixed selling and administrative $151,200 What is the total period cost for the month under the absorption costing approach?

Answer 1

$210,000

Step-by-step explanation:

The computation of total period cost under the absorption costing approach is shown below:-

Total period cost = Variable selling and administrative expenses + Fixed selling and administrative expenses

= (8,400 × $7) + $151,200

= $58,800 + $151,200

= $210,000

Therefore for computing the total period cost under the absorption costing approach we simply applied the above formula.