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The variable costs are direct materials, direct labor, variable manufacturing overhead, sales commissions, and variable administrative expense. If 14,000 units are produced and sold, the variable cost per unit produced and sold is $16.50.
The average fixed cost of a product can be calculated by dividing the total fixed costs by the number of production units over a fixed period.
What is the formula for period cost? Period costs are costs that are not incurred in the manufacturing of a product. The formula for period costs is simply adding up all costs that are classified as period costs.
Answer and Explanation: The total amount of period costs incurred to sell 10,000 units is $65,000. The next step is to determine the total period cost: Total period cost = Number of units Total period cost per unit.
Variable costs are costs that change as the volume changes. Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees. In some accounting statements, the Variable costs of production are called the Cost of Goods Sold.
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For financial accounting purposes, the total amount of period costs incurred to sell 32,500 units is $502,750.
The total product cost formula is Total Product Cost = Cost of Raw Materials + Cost of Direct Labor + Cost of Overhead. Another useful measure is the production cost per unit. This is calculated from the total production cost divided by the total number of units produced.
In managerial and cost accounting, period costs refer to costs that are not tied to or related to the production of inventory. Examples include selling, general and administrative (SGA) expenses, marketing expenses, CEO salary, and rent expense relating to a corporate office.

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