A company's relevant range of production is 18,000 to 22,000 units.
A company’s relevant range of production is 18,000 to 22,000 units.
When it produces 20,000 units, average costs per unit are as follows:
Direct Labor – $7.00
Direct Materials – $4.00
Variable manufacturing overhead – $1.50
Fixed manufacturing overhead – $5.00
Fixed selling expense – $3.50
Fixed admin expense – $2.50
Sales commissions – $1.00
Variable admin expense – $.50
-For financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units?
-For financial accounting purposes, what is the total amount of period costs incurred to sell 18, 000 units?
What is the formula I need to use to calculate these two costs?