Question

Norred Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.05 Direct labor $ 3.70 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 121,500 Sales commissions $ 1.50 Variable administrative expense $ 0.45 Fixed selling and administrative expense $ 44,550 If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Answer 1

$134,300

Step-by-step explanation:

From the question above, we are required to total amount of indirect manufacturing costs that was incurred by Norred corporation with the information that was provided

The first step is to calculate the total variable manufacturing overhead costs

= Variable manufacturing overhead × Units produced

= $1.60 per unit × 8,000 units

= $12,800

Therefore, the total amount of indirect manufacturing costs can be calculated as follows

= Total variable manufacturing costs + Fixed manufacturing overhead

= $12,800 + $121,500

= $134,300

Hence the total amount of indirect manufacturing costs is closest to $134,300