Question

Mullennex Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.55 Direct labor $ 3.50 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.40 Sales commissions $ 1.50 Variable administrative expense $ 0.40 If 5,000 units are produced, the average fixed manufacturing cost per unit produced is closest to:

Answer 1

Answer:

Unitary fixed manufacturing cost= $2.4 per unit

Explanation:

Giving the following information:

Mullennex Corporation's relevant range of activity is 2,000 units to 6,000 units.

For 4,000 units:

Fixed manufacturing overhead $ 3.00

First, we need to calculate the total fixed manufacturing cost:

Total fixed manufacturing cost= 4,000units* $3= $12,000

Now, we can calculate for 5,000 units:

Unitary fixed manufacturing cost= 12,000/5,000= $2.4 per unit