Dake Corporation's relevant range of activity is 4,100 units to 9,500 units. When it produces and sells 6,800 units, its average costs per unit are as follows:

Average Cost per Unit

Direct materials $ 6.70

Direct labor $ 3.80

Variable manufacturing overhead $ 1.45

Fixed manufacturing overhead $ 2.50

Fixed selling expense $ 1.05

Fixed administrative expense $ 0.75

Sales commissions $ 0.85

Variable administrative expense $ 0.75

For financial reporting purposes, the total amount of product costs incurred to make 6,800 units is closest to:

Question

Business

Johanna Mcknight

27 November, 13:53

Dake Corporation's relevant range of activity is 4,100 units to 9,500 units. When it produces and sells 6,800 units, its average costs per unit are as follows:

Average Cost per Unit

Direct materials $ 6.70

Direct labor $ 3.80

Variable manufacturing overhead $ 1.45

Fixed manufacturing overhead $ 2.50

Fixed selling expense $ 1.05

Fixed administrative expense $ 0.75

Sales commissions $ 0.85

Variable administrative expense $ 0.75

For financial reporting purposes, the total amount of product costs incurred to make 6,800 units is closest to:

+1

Answers (1)

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Gretel · Answer 1

We are given different costs in producing the product. In order to determine the total cost, we must get the sum of the total direct/variable costs (for 6,800 units) and the fixed costs.

So,

($6.70 + $3.80 + $1.45 + $0.85 + $0.75) (6,800) + $1.05 + $0.75

= $92,141.80

The total production cost incurred if 6,800 units are produced is $92,141.80.