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20 March, 17:28

Bike Atlanta currently produces 1,000 axles per month. The following per unit data apply for sales to regular customers: Direct materials $30 Direct manufacturing labor 5 Variable manufacturing overhead 10 Fixed manufacturing overhead 40 Total manufacturing costs $85 The plant has capacity for 3,000 axles and is considering expanding production to 3,000 axles. What is the total cost of producing 3,000 axles?

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  1. 20 March, 20:27
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    The total cost of producing 3,000 axles is $255,000

    Explanation:

    The computation of the total cost is shown below:

    = Total per unit manufacturing costs * total number of axles produced

    = $85 * 3,000 axles

    = $255,000

    The total manufacturing includes all costs such as Direct materials, direct manufacturing labor, Variable manufacturing overhead and, Fixed manufacturing overhead.
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