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

question 111

Multiple Choice

Dearman Company, which has only one product, has provided the following data concerning its most recent month of operations:
-What is the total period cost for the month under the absorption costing approach?

• A) $33,600
• B) $65,100
• C) $129,500
• D) $64,400

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to products or job orders, calculated before the period begins based on estimated costs and activity levels.

Manufacturing Overhead

All indirect manufacturing costs, including indirect labor, materials, and other expenses not directly tied to the production of goods.

Finished Goods

Finished goods refer to completed products that are ready for sale but have not yet been sold to customers.

Direct Materials Cost

The expense associated with raw materials that are directly included in the manufacturing of a product, an important component of total production cost.