Question

Perteet Corporation's relevant range of activity is 8,100 units to 15,500 units. When it produces and sells 11,800 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials $ 7.80
Direct labor $ 3.95
Variable manufacturing overhead $ 1.70
Fixed manufacturing overhead $ 3.40
Fixed selling expense $ 0.65
Fixed administrative expense $ 0.35
Sales commissions $ 0.45
Variable administrative expense $ 0.50
If 8,500 units are produced, the total amount of manufacturing overhead cost is closest to:

$37,740
$69,350
$54,570
$29,970

Answer 1

Answer:

Total Overhead 54,570

Explanation:

We are asked for overhead, so the rest ofthe data is irrelevant.

We multiply the variable overhead by the units produced This will be the variable cost.

8,500 * 1.7 = 14,450 Variable Overhead Cost

Then we are given with 11,800 the fixed cost per unit, we are interest in total, so we multiply to get the total fixed cost, the unit fixed cost is not relevant to sovle the question

11,800 *3,40 = 40,120 Fixed Overhead Cost

Finally we add both fugres to get the answer

Total Overhead 54,570