Question

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:

Answer 1

Answer:

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.