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11 December, 14:53

Schonhardt Corporation's relevant range of activity is 2,500 units to 5,500 units. When it produces and sells 4,000 units, its average costs per unit are as follows:

Average

Cost per Unit

Direct materials $ 7.60

Direct labor $ 2.90

Variable manufacturing overhead $ 1.65

Fixed manufacturing overhead $ 2.90

Fixed selling expense $ 0.95

Fixed administrative expense $ 0.65

Sales commissions $ 0.75

Variable administrative expense $ 0.65

If 4,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to:

a $16,800

b $11,400

c $11,600

d $15,400

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Answers (1)
  1. 11 December, 16:12
    0
    c $11,600

    Explanation:

    At 4,000 units the unit cost for the fixed manufacturing overhead is 2.90 dollars

    We multiply it by 4,000 to know the total amount

    $2.90 x 4,000 units = $ 11,600

    These will be fixed cost thus, will not change when we produce between the relevant rage of 2,500 to 5,500 units
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