Question

Mullennex Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.55 Direct labor $ 3.50 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.40 Sales commissions $ 1.50 Variable administrative expense $ 0.40 If 5,000 units are produced, the average fixed manufacturing cost per unit produced is closest to:

Answer 1

$13.2

Step-by-step explanation:

Given that

Direct material = $6.55

Direct labor = $3.50

Variable manufacturing overhead = $1.25

Sales commissions = $1.50

Variable administrative expense = $0.40

The computation of variable cost per unit produced is shown below:-

= Direct material + Direct labor + Variable manufacturing overhead + Sales commissions + Variable administrative expense

= $6.55 + $3.50 + $1.25 + $1.50 + $0.40

= $13.2