Rhome Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and...
Rhome 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 | $ | 5.40 |
| Direct labor | $ | 3.55 |
| Variable manufacturing overhead | $ | 1.70 |
| Fixed manufacturing overhead | $ | 3.00 |
| Fixed selling expense | $ | 0.60 |
| Fixed administrative expense | $ | 0.40 |
| Sales commissions | $ | 1.00 |
| Variable administrative expense | $ | 0.40 |
If 5,000 units are produced, the total amount of manufacturing overhead cost is closest to:
-
$19,250
-
$18,000
-
$23,000
-
$20,500
Homework Answers
Calculate total amount of manufacturing overhead
| Variable manufacturing overhead (5000*1.7) | 8500 |
| Fixed manufacturing overhead (4000*3) | 12000 |
| Total manufacturing overhead | 20500 |
So answer is d) $20500
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