Question

Perteet Corporation's relevant range of activity is 6,300 units to 12,500 units. When it produces and sells 9,400 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 3.65 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 2.90 Fixed selling expense $ 0.65 Fixed administrative expense $ 0.35 Sales commissions $ 0.45 Variable administrative expense $ 0.50 If 6,800 units are produced, the total amount of manufacturing overhead cost is closest to:

Answer 1

To calculate the total amount of manufacturing overhead cost when 6,800 units are produced, we need to use the fixed manufacturing overhead cost per unit and multiply it by the number of units produced. In this case, the fixed manufacturing overhead cost per unit is $2.90. Therefore, the total amount of manufacturing overhead cost when 6,800 units are produced is approximately $19,720.

Step-by-step explanation:

To determine the total amount of manufacturing overhead cost when 6,800 units are produced, we need to calculate the fixed manufacturing overhead for that level of production. The relevant range of activity for Perteet Corporation is 6,300 to 12,500 units, so we can assume that fixed manufacturing overhead remains constant within that range.

For the given information, the average cost per unit includes the fixed manufacturing overhead, which is $2.90 per unit. So, if we produce 9,400 units, the total fixed manufacturing overhead cost will be 9,400 units × $2.90 = $27,260. Since the fixed manufacturing overhead cost doesn't change within the relevant range, we can use the same cost per unit to calculate the total amount of manufacturing overhead cost when 6,800 units are produced.

Therefore, the total amount of manufacturing overhead cost when 6,800 units are produced is approximately $6,800 units × $2.90 = $19,720.

Answer 2

For 6,800 units the the manufacturing overheads will be $ 3120

Step-by-step explanation:

Particulars Average Cost per Unit

Direct materials $ 7.20

Direct labor $ 3.65

Variable manufacturing overhead $ 1.70

Fixed manufacturing overhead $ 2.90

Total Manufacturing Costs $ 15.45

The Manufacturing Overheads = Variable manufacturing overhead + Fixed manufacturing overhead = $ 1.70 + $ 2.90 = $ 4.6 per unit

For 6,800 units the the manufacturing overheads will be 4.6 * 6,800=$ 3120

We calculate the manufacturing overheads for 6800 by multiplying it with the

manufacturing overheads per unit.