Dake Corporation’s relevant range of activity Is 4,500 units to 8,500 units. When it produces and…
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Question “Dake Corporation’s relevant range of activity Is 4,500 units to 8,500 units. When it produces and…”
Dake Corporation’s relevant range of activity Is 4,500 units to 8,500 units. When it produces and sells 6,500 units, Its average costs per unit are as follows: Average Cost per Unit Direct materials $6.40 Direct labor $3.50 Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense $2.00 $2.20 $0.90 $0.60 Sales commissions $0.70 Variable administrative expense $0.60 If 5,500 units are produced, the total amount of Indirect manufacturing cost Incurred is closest to: Multiple Cholce $11,000 $14,300
$25,300 $23,100
Answer
Answer: $25,300
Explanation
Total indirect manufacturing costs = variable manufacturing expenses + fixed production expenses
Variable cost = $2 *5500 units = $11,000
Fixed overhead = 2.20 * 6500 units= 14.300
Thus, total indirect manufacturing costs incurred = $11,000+$14,000.300
= $25,300
Conclusion
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