Final answer:
The total amount of product costs incurred to make 28,000 units is $680,400; this includes direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead.
Step-by-step explanation:
To calculate the total amount of product costs incurred to make 28,000 units, you need to consider both variable and fixed costs associated with production. Product costs typically include direct materials, direct labor, and manufacturing overhead.
First, calculate the total variable costs by adding together the average costs for direct materials, direct labor, and variable manufacturing overhead, and then multiplying by the number of units produced:
Direct materials: $8.70 per unit
Direct labor: $5.70 per unit
Variable manufacturing overhead: $3.20 per unit
Total variable cost per unit = $8.70 + $5.70 + $3.20 = $17.60
Total variable cost for 28,000 units = 28,000 units x $17.60 = $492,800
Next, calculate the total fixed manufacturing overhead by multiplying the average fixed manufacturing overhead per unit by the number of units produced:
Total fixed manufacturing overhead = $6.70 per unit x 28,000 units = $187,600
Finally, the total product costs is the sum of the total variable costs and total fixed manufacturing overhead:
Total product costs = Total variable costs + Total fixed manufacturing overhead
Total product costs = $492,800 + $187,600 = $680,400
Sales commissions and variable/fixed administrative expenses are not included in product costs because they are considered period costs, which are not directly tied to the production process.