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Grip Manufacturing currently produces 2000 tires per month. The following per unit data for 2000 tires apply for sales to reg
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Answer #1

Direct materials per unit = $39

Direct manufacturing labor per unit= $6

Variable manufacturing overhead per unit = $10

Fixed manufacturing overhead per unit = $14

Total fixed manufacturing overhead for 2000 tires = 14 x 2,000

= $28,000

Calculation of Total Cost of production 3,000 tires
Direct materials (3,000 x 39) 117,000
Direct manufacturing labor (3,000 x 6) 18,000
Variable manufacturing overhead (3,000 x 10) 30,000
Fixed manufacturing overhead 28,000
Total cost $193,000

The cost of production 3,000 tires is $193,000.

First option is correct.

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