Question

Schonhardt 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 $ 7.15
Direct labor $ 3.40
Variable manufacturing overhead $ 1.35
Fixed manufacturing overhead $ 2.80
Fixed selling expense $ 0.70
Fixed administrative expense $ 0.40
Sales commissions $ 0.50
Variable administrative expense $ 0.40

If 4,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to:

Answer 1

Answer:

$11,200

Explanation:

The computation of the amount of the total amount of fixed manufacturing cost incurred is shown below:

= Number of units produced and sold × Fixed manufacturing overhead per unit

= 4,000 units × $2.80

= $11,200

By applying the Number of units produced and sold with the Fixed manufacturing overhead per unit we can find out the fixed manufacturing overhead cost