Question

Sleep Tight manufactures pillows. The company incurred $42,000 of fixed manufacturing overhead cost this year. Variable unit product cost was $17. Variable selling and administrative cost was $9 per unit and fixed selling and administrative expenses totaled $59,000. The company manufactured 28,000 pillows and sold 15,408. Total fixed expenses on the variable costing contribution format income statement equal:_______.

a. $101,000.

b. $59,000.

c. $708,768.

d. $671,096.

Answer 1

Option A is correct

Total fixed expenses =$101,000.

Step-by-step explanation:

The total fixed expenses is the sum of all categories of fixed costs. The variable costing system charges units produced using the marginal cost.And it categories costs into fixed and variable cost

Total fixed expenses= Fixed manufacturing + Fixed selling and administrative

= 42,000 + 59,000= $101,000.