Answer:
If volume increases to 6,000 units and both 5,000 units and 6,000 units are within the relevant range, the company would expect to incur total factory overhead costs of $35,600
Explanation:
At a volume of 5,000 units, Pwerson Company incurred $32,000 in factory overhead costs, including $14,000 in fixed costs.
The variable in factory overhead costs = $32,000 - $14,000 = $18,000
The variable in factory overhead costs per unit = $18,000/5,000 = $3.6
Both 5,000 units and 6,000 units are within the relevant range. Therefore, when volume increases to 6,000 units, fixed costs are not change.
The variable in factory overhead costs = $3.6 x 6,000 = $21,600
Total factory overhead costs = $21,600 + $14,000 = $35,600
