Question

Bellucci Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.60 Direct labor $ 3.30 Variable manufacturing overhead $ 1.10 Fixed manufacturing overhead $ 109,250 Sales commissions $ 1.05 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 38,950 The incremental manufacturing cost that the company will incur if it increases production from 9,500 to 9,501 units is closest to (assume that the increase is within the relevant range):

Answer 1

$ 11.00

Step-by-step explanation:

Within the relevant range, only the variable costs will change. The fixed costs will remain constant.

So, the first step is to calculate the Total Variable Manufacturing Cost per unit then apply that to the 1 unit of additional production.

Total Variable Manufacturing Cost

Direct materials $ 6.60

Direct labor $ 3.30

Variable manufacturing overhead $ 1.10

Total Cost $ 11.00

Therefore, The incremental manufacturing cost that the company will incur is $ 11.00.