Question

For financial reporting purposes, the total amount of product costs incurred to make 6,800 units is closest to:

Answer 1

a. $98,260

Step-by-step explanation:

Note: The full question is attached as picture below

Fixed manufacturing overheads = 6800*$2.50

Fixed manufacturing overheads = $17,000

Total variable costs = (Direct materials + Direct labor + Variable manufacturing overhead) * 6800 units

Total variable costs = ($6.70 + $3.80 + $1.45) * 6800 units

Total variable costs = $11.95 * 6800 units

Total variable costs = $8,1260.

So, total product costs = Total variable costs + Fixed manufacturing overheads = $81,260 + $17,000 = $98,260