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fiasKO [112]
3 years ago
5

A company's relevant range of production is 10,000 to 15,000 units. When it produces and sells 12,000 units, its unit costs are

as follows: Amount per Unit Direct materials $ 7.00 Direct labor $ 4.00 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 5.00 Fixed selling expense $ 3.50 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 If 10,300 units are produced, what is the total amount of indirect manufacturing costs incurred to support this level of production
Business
1 answer:
DENIUS [597]3 years ago
7 0

Answer:

Total indirect manufacturing cost= $75,450

Explanation:

Giving the following information:

12,000 units:

Variable manufacturing overhead $ 1.50

Fixed manufacturing overhead $ 5.00

<u>First, we need to calculate the total fixed manufacturing overhead:</u>

Total fixed overhead= 5*12,000= $60,000

<u>Now, for 10,300 units:</u>

Total indirect manufacturing cost= 60,000 + 10,300*1.5

Total indirect manufacturing cost= $75,450

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