Question: The table below has the costs for a specific period: Cost Item Amount Direct labour $90,000 Direct material - $80,000 Advertising - $40,000 Factory supervision

The table below has the costs for a specific period:

Cost Item Amount Direct labour $90,000

Direct material - $80,000

Advertising - $40,000

Factory supervision - $50,000

Sales commissions - $60,000

Depreciation, administrative office equipment - $5,000

Indirect materials, factory - $7,000

Depreciation, factory building - $10,000

Administrative office supplies - $3,000

Required:

(a) What is the total period cost?(2 marks)

(b) What is the total direct product cost? (2 marks)

(d) From the cost items listed in the above, list one indirect product cost which varies with the level of output.(2 marks)

(e) Under variable costing, what is the average unit product cost for the specific period? Consider that during this specific period 1,000 units of only one type of product were manufactured.(2 marks)

(f) Under absorption costing, what is the average unit product cost for the specific period? Consider that during this specific period 1,000 units of only one type of product were manufactured.(2 marks)

(g) What is the underlying difference and implication between variable and absorption costing product per unit?(4 marks)

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a To calculate the total period cost you need to sum up all the costs mentioned in the table 90000 Direct labor 80000 Direct material 40000 Advertisin... View full answer

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