Hatfield Company, Which Has Only One Product, Has Provided the Following

question 81

Multiple Choice

Hatfield Company, which has only one product, has provided the following data concerning its most recent month of operations:
$\begin{array} { | l | r | } \hline \text { Selling price } & \$ 123 \\\hline \text { Units in beginning inventory } & 0 \\\hline \text { Units produced } & 6,400 \\\hline \text { Units in ending inventory } & 300 \\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 45 \\\hline \text { Direct labour } & \$ 30 \\\hline \text { Variable manufacturing overhead } & \$ 1 \\\hline \text { Variable selling and administrative } & \$ 8 \\\hline \text { Fixed costs: } & \\\hline \text { Fixed manufacturing overhead } & \$ 140,800\\ \hline \text { Fixed selling and administrative } & \$ 91,500 \\\hline\end{array}$

-What was the total period cost for the month under the variable costing approach?

• A) $140,300.
• B) $140,800.
• C) $232,300.
• D) $281,100.

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Definitions:

Rental Period

The defined length of time for which a lessee has the right to use the leased property.

Commercial Lease

A legally binding agreement between a landlord and a business for the rental of property used for commercial purposes.

Two Months' Notice

A formal notification, often in employment or tenancy agreements, requiring two months' advance warning before termination.

Landlord

An owner of property who rents it out to tenants in exchange for monthly rent.