Schonhardt Corporation's relevant range of activity is 2,500 units to 5,500 units. When it produces and sells 4,000 units, its average costs per unit are as follows:

Average

Cost per Unit

Direct materials $ 7.60

Direct labor $ 2.90

Variable manufacturing overhead $ 1.65

Fixed manufacturing overhead $ 2.90

Fixed selling expense $ 0.95

Fixed administrative expense $ 0.65

Sales commissions $ 0.75

Variable administrative expense $ 0.65

If 4,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to:

a $16,800

b $11,400

c $11,600

d $15,400

Question

Business

Miguel Wilcox

15 December, 15:35

Schonhardt Corporation's relevant range of activity is 2,500 units to 5,500 units. When it produces and sells 4,000 units, its average costs per unit are as follows:

Average

Cost per Unit

Direct materials $ 7.60

Direct labor $ 2.90

Variable manufacturing overhead $ 1.65

Fixed manufacturing overhead $ 2.90

Fixed selling expense $ 0.95

Fixed administrative expense $ 0.65

Sales commissions $ 0.75

Variable administrative expense $ 0.65

If 4,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to:

a $16,800

b $11,400

c $11,600

d $15,400

+2

Answers (1)

Know the Answer?

Piper Randolph · Answer 1

c $11,600

Explanation:

At 4,000 units the unit cost for the fixed manufacturing overhead is 2.90 dollars

We multiply it by 4,000 to know the total amount

$2.90 x 4,000 units = $ 11,600

These will be fixed cost thus, will not change when we produce between the relevant rage of 2,500 to 5,500 units