Question

unchak Company's relevant range of production is 9,000-11,000 units. Last mo anufacturing cost per unit produced was $70. At this level of activity the comp anufacturing costs. equired: ssume that next month Munchak produces 10,050 units and that its cost behavi ollowing statements as true or false with respect to next month. Statement 1The variable manufacturing cost per unit will remain the same as last month. 2 The total fixed manufacturing cost will be greater than last month 3. The total manufacturing cost will be greater than last month. 4 The average fixed manufacturing cost per unit will be less than last month. 5 The total variable manufacturing cost will be less than last month 6. The total manufacturing cost per unit will be greater than last month. 7 The variable manufacturing cost per unit will equal $28 The total fixed manufacturing cost will equal $422.100 9. The total manufacturing cost will equal $701.400. 10. The average fixed manufacturing cost per unit (rounded to the nearest cent) will equal $41.79 11. The total variable manufacturing cost will equal $280,000. 12. The total manufacturing cost per unit (rounded to the nearest cent) will equal $69.79. 1 of 2

Answer 1

Solution:

1.) True

The variable manufacturing cost per unit will remain the same within the relevant range.

2.) False

The total fixed manufacturing cost will remain the same within the relevant range.

3.) True

Because the total variable manufacturing cost will increase, so the total manufacturing cost will increase too.

4.) True

The average fixed manufacturing cost per unit will decrease as the level of activity increases.

5.) False

The total variable manufacturing cost will be increase( rather than decrease) as the actvity increase.

6.) False

The variable manufacturing cost per unit will remain the same, but the average fixed manufacturing cost per unit will decrease as the level of activity increases.