Variable selling and administrative expense is $12,000
Given:
Total sales = $300,000
Direct labor cost = $40,000 is 25% of total conversion costs and 40% of total prime costs
Total selling and administrative expense = $62,000
Variable selling and administrative expense = Sales commissions of 4% of sales
Find:
Total variable selling and administrative cost
Computation:
Variable selling and administrative expense = Sales commissions of 4% of sales × Total sales
Variable selling and administrative expense = 4% × $300,000
Variable selling and administrative expense = $12,000
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