Kwik Delivery Service Reports the Following Costs and Expenses in June

question 43

Essay

Kwik Delivery Service reports the following costs and expenses in June 2016.
Instructions
Determine the total amount of (a) delivery service (product) costs and (b) period costs.

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Production Cost

The total expense incurred in manufacturing goods, including materials, labor, and overhead costs.

Variable Overhead

The costs that fluctuate with the level of production or business activity, such as utilities or materials.

Variable Costing

A pricing approach that incorporates only those production expenses that vary—such as direct materials, direct labor, and variable manufacturing overhead—into the cost of products.