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17 July, 14:17

Pedregon Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.95 Direct labor $ 3.50 Variable manufacturing overhead $ 1.75 Fixed manufacturing overhead $ 19,800 Sales commissions $ 0.40 Variable administrative expense $ 0.50 Fixed selling and administrative expense $ 7,700 If 4,500 units are produced, the total amount of manufacturing overhead cost is closest to: Multiple Choice $23,625 $35,375 $27,675 $25,875

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  1. 17 July, 17:55
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    The correct answer is $27,675.

    Explanation:

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

    Variable manufacturing OH = $1.75

    Fixed manufacturing OH = $19,800

    Units = 4,500 units

    So, we can calculate the total amount of manufacturing overhead cost by using following formula:

    Total manufacturing OH = Total variable OH + Total fixed OH

    Where, Total variable OH = $1.75 * 4,500 = $7,875

    By putting the value, we get

    Total Manufacturing OH = $7,875 + $19,800

    = $27,675
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