Question

Perteet corporation's relevant range of activity is 8,400 units to 16,000 units. when it produces and sells 12,200 units, its average costs per unit are as follows: . Average cost ( per unit ) Direct materials $ 7.90 Direct labor $ 4.00 Variable manufacturing overhead $ 1.80 Fixed manufacturing overhead $ 3.60 Fixed selling expense $ 0.70 Fixed administrative expense $ 0. 40 Sales commissions $ 0.50 Variable administrative expense Average Cost per Unit $ 0.55 If 9,000 units are produced, the total amount of manufacturing overhead cost is closest to A. $41,040 B. $74,320 C. $60120 D. $32,680

Answer 1

The total amount of manufacturing overhead cost when 9,000 units are produced is $21,780.

Step-by-step explanation:

The relevant range of activity for Perteet Corporation is 8,400 units to 16,000 units. When producing and selling 12,200 units, the average costs per unit are as follows:

• Direct materials: $7.90
• Direct labor: $4.00
• Variable manufacturing overhead: $1.80
• Fixed manufacturing overhead: $3.60
• Fixed selling expense: $0.70
• Fixed administrative expense: $0.40
• Sales commissions: $0.50
• Variable administrative expense: $0.55

To find the total amount of manufacturing overhead cost when 9,000 units are produced, we can calculate:

Total manufacturing overhead cost = (Fixed manufacturing overhead + (Variable manufacturing overhead per unit * Number of units) = (3.60 + (1.80 * 9,000) = $21,780