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Stanfil Corporation developed a cost function for manufacturing overhead costs of Y = $8,000 + 1.60X. Estimated manufacturing overhead costs at 10,000 units of production are:

a. $16,000
b. $17,000
c. $24,000
d. $26,000

User Jay Hu
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Final answer:

The estimated manufacturing overhead costs at 10,000 units of production using Stanfil Corporation's cost function Y = $8,000 + 1.60X are $24,000. This is calculated by multiplying 10,000 units by the variable cost per unit which is $1.60, and then adding the fixed cost of $8,000.the right answer is c)

Step-by-step explanation:

The question involves a cost function used by the Stanfil Corporation for estimating manufacturing overhead costs, represented by Y = $8,000 + 1.60X, where Y is the total overhead cost and X is the number of units produced. The cost function includes a fixed cost, often referred to as overhead, and a variable cost proportional to the units of production. To calculate the estimated manufacturing overhead costs at 10,000 units of production, we can substitute X with 10,000 in the given cost function.

Step 1: Identify the fixed cost and variable cost per unit from the cost function.

Fixed cost (overhead): $8,000

Variable cost per unit: $1.60

Step 2: Substitute the number of units into the cost function.

Y = $8,000 + 1.60(10,000)

Step 3: Perform the calculation.

Y = $8,000 + $16,000

Y = $24,000

The estimated manufacturing overhead costs at 10,000 units of production are $24,000, thus the correct answer is option (c).

User Vakio
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