Torgette Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and...
Torgette Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows:
Ave Cost
Per Unit
| Direct materials | $ 7.15 |
| Direct labor | $ 3.40 |
| Variable manufacturing overhead | $ 1.35 |
| Fixed manufacturing overhead | $ 2.80 |
| Fixed selling expense | $ 0.70 |
| Fixed administrative expense | $ 0.40 |
| Sales commissions | $ 0.50 |
| Variable administrative expense | $ 0.40 |
If 5,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to:
$11,200
$12,600
$16,800
$14,000
Homework Answers
Fixed manufacturing costs at 4000 units was=(4000*2.8)
=$11200
Hence at 5000 units;total amount of fixed manufacturing cost incurred would be equal to
=$11200
NOTE:Total fixed costs and variable cost per unit do not change with change in units
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