Ask Question
20 October, 21:35

Mount Company incurred a total cost of $8,600 to produce 400 units of pulp. Each unit of pulp required 5 direct labor hours to complete. What is the total fixed cost if the variable cost was $1.50 per direct labor-hour? A. $2,600 B. $5,600 C. $1,700 D. $4,100

+5
Answers (1)
  1. 21 October, 00:31
    0
    The correct answer is option (B).

    Explanation:

    According to the scenario, the given data are as follows:

    Total cost = $8,600

    Total units = 400 Units

    Direct labor hour per unit = 5

    Variable cost = $1.50

    So, we can calculate the fixed cost by using following formula:

    Fixed cost = Total cost - Total Direct labor cost

    Where, Total direct labor cost = $1.50 * 5 * 400 = $3,000

    By putting the value in the formula, we get

    Fixed cost = $8,600 - $3,000

    = $5,600
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Mount Company incurred a total cost of $8,600 to produce 400 units of pulp. Each unit of pulp required 5 direct labor hours to complete. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers