Question

Schwiesow Corporation has provided the following information: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense Cost Cost per per Period Unit $7.75 $3.70 $1.35 $12,500 $1.00 $0.60 $ 6,300 If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Answer 1

Solution:

The Total manufacturing overhead cost is calculated as follows:

= Variable Manufacturing overhead cost + Fixed Manufacturing overhead cost

As per the information given in the question we have

Fixed Manufacturing overhead = $ 12,500

No. of Units produced = 4,000 ; Variable manufacturing overhead cost per unit = $ 1.35 ;

Thus the Total Variable Manufacturing overhead = No. of Units produced * Variable manufacturing overhead cost per unit

= 4,000 * $ 1.35 = $ 5,400

Thus, Total Manufacturing overhead cost = $ 5,400 + $ 12,500 = $ 17,900

The solution is Option 4 = $ 17,900