Question

n taition Per Unit Direct materials $6.00 Direct labor $3.50 Variable manufacturing overhead $1.50 Fixed manufacturing overhead $4.00 Fixed selling expense $3.00 Fixed administrative expense $2.00 Sales commissions $1.00 Variable administrative expense $0.50 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 10.000 units? 3. If 8,000 units are sold, what is the variable cost per unit sold? 4. If 12,500 units are sold, what is the variable cost per unit sold? TOMA

Answer 1

1.Product Cost

Product cost incurred to make 10,000 units
Particulars	Per unit	10,000units
Direct material	6.00	60,000.00
Direct Labour	3.50	35,000.00
Variable manufacturing overhead	1.50	15,000.00
Fixed manufacturin overhead	4.00	40,000.00
Total Product costs	15.00	150,000.00

Production or product costs refer to the costs incurred by a business from manufacturing a product or providing a service. Production costs can include a variety of expenses, such as labor, raw materials, consumable manufacturing supplies, and general overhead. Product costs may also include those incurred as part of the delivery of a service to a customer. Taxes levied by the government or royalties owed by natural resource-extraction companies also are treated as production costs.

2.Period Cost

Period cost incurred to sell 10,000 units
Particulars	Per unit	10,000units
Fixed Selling Expense	3.00	30,000.00
Fixed Administrative expense	2.00	20,000.00
Sales Commission	1.00	10,000.00
Variable Administrative expense	0.50	5,000.00
Total Product costs	6.50	65,000.00

Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business. Period costs are not assigned to one particular product or the cost of inventory like product costs

3. Variable Cost for 8,000 unit sold

Variable cost incurred to 8,000 unit sold
Particulars	Per unit	8,000units
Direct material	6.00	48,000.00
Direct Labour	3.50	28,000.00
Variable manufacturing overhead	1.50	12,000.00
Sales Commission	1.00	8,000.00
Variable Administrative expense	0.50	4,000.00
Total Product costs	12.50	100,000.00

A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company's production volume; they rise as production increases and fall as production decreases

4.Variable Cost incurred to 12,500 unit sold

Variable Cost Per Unit = 12.5

Number unit sold = 12,500

Total Variable Cost =(12.5*12,500) = 156,250

Note

in the absence of fixed cost details in question , I just multipiled with the number of units

If there is any information say fixed manufacturing overhead for 1,000 units is $ 4,000 and per unit is $4 (4000/1000)

then fixed matnufacturing overhead for 10,000 units will be $ 4,000 because fixed cost will not change with volume of production.