Hixson Company manufactures and sells one product for $34 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Hixson produces and sells 25,000 units, its unit costs are as follows: Amount Per UnitDirect materials$ 8.00Direct labor$ 5.00Variable manufacturing overhead$ 1.00Fixed manufacturing overhead$ 6.00Fixed selling expense$ 3.50Fixed administrative expense$ 2.50Sales commissions$ 4.00Variable administrative expense$ 1.00 Required:For financial accounting purposes, what is the total amount of product costs incurred to make 25,000 units? What is the total amount of period costs incurred to sell 25,000 units?

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...

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Hixson Company manufactures and sells one product for $34 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Hixson produces and sells 25,000 units, its unit costs are as follows:

	Amount Per Unit
Direct materials	$ 8.00
Direct labor	$ 5.00
Variable manufacturing overhead	$ 1.00
Fixed manufacturing overhead	$ 6.00
Fixed selling expense	$ 3.50
Fixed administrative expense	$ 2.50
Sales commissions	$ 4.00
Variable administrative expense	$ 1.00

Required:

For financial accounting purposes, what is the total amount of product costs incurred to make 25,000 units? What is the total amount of period costs incurred to sell 25,000 units?

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