Dake Corporation's relevant range of activity is 4,900 units to 5,500 units. When it produces and...
Dake Corporation's relevant range of activity is 4,900 units to 5,500 units. When it produces and sells 5,200 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 6.50 |
| Direct labor | $ | 3.70 |
| Variable manufacturing overhead | $ | 2.10 |
| Fixed manufacturing overhead | $ | 3.00 |
| Fixed selling expense | $ | 1.00 |
| Fixed administrative expense | $ | 0.70 |
| Sales commissions | $ | 0.80 |
| Variable administrative expense | $ | 0.70 |
If 5,100 units are produced, the total amount of direct manufacturing cost incurred is closest to:
Multiple Choice
-
$78,030
-
$52,020
-
$62,730
-
$64,770
Homework Answers
Direct manufacturing cost = (Direct materials + Direct labor) * units produced
= ($6.50 + $3.70) *5,100
= $10.20 * 5,100
= $52,020
Option $52,020 is the correct answer.
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