Question

Meginnis Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $5.20 Direct labor $3.75 Variable manufacturing overhead $1.65 Fixed manufacturing overhead $2.60 Fixed selling expense $0.50 Fixed administrative expense $0.40 Sales commissions $1.50 Variable administrative expense $0.50 If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

Answer 1

$53,700

Step-by-step explanation:

The computation of the direct manufacturing cost is shown below:

Direct manufacturing cost is

= (Direct material per unit + Direct labor per unit) × Units produced

= ($5.20 + $3.75) × 6,000 units

= $8.95 × 6,000

= $53,700

Hence, we applied the above formula to determine the direct manufacturing cost and the same is to be considered