Rhome Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials $ 5.40
Direct labor $ 3.55
Variable manufacturing overhead $ 1.70
Fixed manufacturing overhead $ 3.00
Fixed selling expense $ 0.60
Fixed administrative expense $ 0.40
Sales commissions $ 1.00
Variable administrative expense $ 0.40
If 5,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to:
A. $18,000
B. $12,000
C. $13,500
D. $15,000
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