Question

Bellucci Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.40 Direct labor $ 3.65 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 117,900 Sales commissions $ 1.20 Variable administrative expense $ 0.75 Fixed selling and administrative expense $ 44,100 The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to (assume that the increase is within the relevant range):

Answer 1

When one more unit is produced, the manufacturing cost increases by $12.5

Step-by-step explanation:

Giving the following information:

Direct materials $ 7.40

Direct labor $ 3.65

Variable manufacturing overhead $ 1.45

The manufacturing cost is the sum of direct material, direct labor, and manufacturing overhead. Because we need to calculate the incremental cost, we will not take into account the fixed overhead.

Variable manufacturing cost per unit= 7.4 + 3.65 + 1.45= $12.5

When one more unit is produced, the manufacturing cost increases by $12.5