Question

The Happy Speaker Manufacturing Company currently produces 12,000 speakers per month. The following are per unit data for the 12,000 speakers: Direct materials $75 Direct manufacturing labor 20 Variable manufacturing overhead 20 Fixed manufacturing overhead 40 Total manufacturing cost $155 The plant has capacity for 16,000 speakers and is considering expanding production to 16,000 speakers. What is the manufacturing cost of producing 16,000 speakers

Answer 1

Answer:

Total cost= $2,160,000

Explanation:

Giving the following information:

12,000 speakers:

Direct materials $75

Direct manufacturing labor 20

Variable manufacturing overhead 20

Fixed manufacturing overhead 40

Total manufacturing cost $155

First, we need to calculate the total fixed manufacturing overhead:

Total fixed overhead= 40*12,000= $480,000

Now, the total cost for 16,000 units:

Total cost= 16,000*(75 + 20 + 20) + 480,000

Total cost= $2,160,000