Question

Kesterson Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.75 Direct labor $ 3.40 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 25,200 Sales commissions $ 1.30 Variable administrative expense $ 0.30 Fixed selling and administrative expense $ 6,300 If 11,500 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Answer 1

Answer :

Indirect manufacturing cost =$44,750

Explanation :

As per the data given in the question,

Direct material = $6.75

Direct Labor = $3.40

Variable manufacturing overhead = $1.70

Fixed manufacturing overhead = $25,200

The computation of the indirect manufacturing cost is shown below:

Indirect manufacturing cost = Variable overhead + Fixed overhead

= $11,500 units  × $1.7 + $25,200

= $44,750

We simply added the variable overhead and the fixed overhead so that the indirect manufacturing cost could come