Question

Perteet Corporation's relevant range of activity is 5,100 units to 10,500 units. When it produces and sells 7,800 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $6.80 Direct labor $3.45 Variable manufacturing overhead $1.90 Fixed manufacturing overhead $3.80 Fixed selling expense $0.65 Fixed administrative expense $0.35 Sales commissions $0.45 Variable administrative expense $0.50 If 5,400 units are produced, the total amount of manufacturing overhead cost is closest to:

Answer 1

Total overhead= $39,900

Step-by-step explanation:

Giving the following information:

Variable manufacturing overhead $1.90

First, we need to calculate the total fixed overhead:

Total fixed overhead= 7,800*3.8

Total fixed overhead= $29,640

Now, the total overhead for 5,400 units:

Total variable overhead= 1.9*5,400= 10,260

Total fixed overhead= 29,640

Total overhead= $39,900