Answer:
The cost of production at the activity level of 2,200,000 units is $1,913,000
Explanation:
Total budgeted variable costs per unit
= Direct materials + Direct labor + Variable overhead
= $0.35 + $0.28 + ($0.04 + $0.09 + $0.03)
= $0.35 + $0.28 + $0.16
= $0.79
Cost of Production
= Total Variable costs + Total Fixed costs
= (Units produced*Variable costs per unit) + (Rent + Depreciation)
= (2,200,000*$.79) + ($25,000 + $150,000)
= $1,738,000 + $175,000
= $1,913,000
Therefore, The cost of production at the activity level of 2,200,000 units is $1,913,000
