Question

Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 4,700 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.10 Direct labor $ 3.60 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 3.90 Fixed selling expense $ 0.75 Fixed administrative expense $ 0.60 Sales commissions $ 0.50 Variable administrative expense $ 0.50 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 4,700 units

Answer 1

Answer:

$71,910

Explanation:

The computation of the total amount of the product cost for 4,700 units is shown below:

= ( Direct materials per unit + Direct labor per unit + Variable manufacturing overhead per unit + Fixed manufacturing overhead per unit) × making units

= ($6.10 + $3.60 + $1.70 + $3.90) × 4,700 units

= $71,910

We simply considered the direct material, direct labor, variable manufacturing overhead, and the fixed manufacturing overhead as it comes under the product cost