Question

Balerio Corporation's relevant range of activity is 9,000 units to 14,000 units. When it produces and sells 11,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.30 Direct labor $ 3.90 Variable manufacturing overhead $ 2.20 Fixed manufacturing overhead $ 14.10 Fixed selling expense $ 2.65 Fixed administrative expense $ 1.70 Sales commissions $ 0.50 Variable administrative expense $ 0.40 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 11,000 units

Answer 1

$302,500

Step-by-step explanation:

The computation of total amount of product costs is shown below:-

Product cost for 11,000 units = Direct material + Direct labor + Manufacturing overhead cost incurred

= ($7.30 + $3.90 + $2.20 + $14.10) × 11,000

= $27.50 × 11,000

= $302,500

Therefore for computing the total amount of product costs we simply applied the above formula.