Answer:
Instructions are below.
Explanation:
Giving the following information:
When it produces and sells 4,000 units, its average costs per unit are as follows:
Variable manufacturing overhead $1.40
Fixed manufacturing overhead $ 2.60
Units produced= 3,000
<u>To calculate the unitary indirect manufacturing cost, you can use two different methods</u>. The variable method only uses the variable manufacturing overhead. The absorption method uses the total unitary overhead.
Total fixed overhead= 2.6*4,000= 10,400
<u>Variable costing method</u>:
Unitary indirect manufacturing cost= $1.4
<u>Absorption costing method:</u>
Unitary fixed overhead= 10,400/3,000= $3.47
Unitary indirect manufacturing cost= 1.4 + 3.47= $4.87
