Question

Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 4,100 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.70 Direct labor $ 3.40 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 3.80 Fixed selling expense $ 0.70 Fixed administrative expense $ 0.55 Sales commissions $ 0.45 Variable administrative expense $ 0.45 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 4,100 units

Answer 1

$63,140

Step-by-step explanation:

For computing the total amount of product cost first we have to find out the total product cost per unit which is shown below

Direct material cost per unit + Direct labor cost per unit + Variable manufacturing overhead per unit + Fixed manufacturing overhead per unit.

= $6.70 + $3.40 + $1.50 + $3.80

= $15.40

Now the

Product cost is

= units produced × cost per unit

= 4,100 units × $15.40

= $63,140

We simply applied the above formulas