Perteet Corporation's relevant range of activity is 6,300 units to 12,500 units. When it produces and sells 9,400 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 3.65 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 2.90 Fixed selling expense $ 0.65 Fixed administrative expense $ 0.35 Sales commissions $ 0.45 Variable administrative expense $ 0.50 If 6,800 units are produced, the total amount of manufacturing overhead cost is closest to:

Question

Business

Sage Baird

1 November, 11:09

Perteet Corporation's relevant range of activity is 6,300 units to 12,500 units. When it produces and sells 9,400 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 3.65 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 2.90 Fixed selling expense $ 0.65 Fixed administrative expense $ 0.35 Sales commissions $ 0.45 Variable administrative expense $ 0.50 If 6,800 units are produced, the total amount of manufacturing overhead cost is closest to:

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Nathaly Bartlett · Answer 1

For 6,800 units the the manufacturing overheads will be $ 3120

Explanation:

Particulars Average Cost per Unit

Direct materials $ 7.20

Direct labor $ 3.65

Variable manufacturing overhead $ 1.70

Fixed manufacturing overhead $ 2.90

Total Manufacturing Costs $ 15.45

The Manufacturing Overheads = Variable manufacturing overhead + Fixed manufacturing overhead = $ 1.70 + $ 2.90 = $ 4.6 per unit

For 6,800 units the the manufacturing overheads will be 4.6 * 6,800=$ 3120

We calculate the manufacturing overheads for 6800 by multiplying it with the

manufacturing overheads per unit.