Question

Dake Corporation's relevant range of activity is 2,200 units to 5,000 units. When it produces and sells 3,600 units, its average costs per unit are as follows For financial reporting purposes, the total amount of product costs incurred to make 3,600 units is closest to:

Answer 1

Answer: $50,940

Explanation:

The total amount of product costs incurred to make 3,600 units will be calculated as:

Direct materials = 3600 x 6.85 = 24660

Add: Direct labor= 3600 x 2.80= 10080

Add: Variable manufacturing overhead = 3,600 x 1.50 = 5400

Add: Fixed manufacturing overhead = 3600 x 3 = 10,800

Therefore, the Total product cost will be:

= 24660 + 10080 + 5400 + 10800

= $50,940