Schonhardt Corporation's relevant range of activity is 2,900 units to 7,500 units. When it produces and sells 5,200 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 3.40 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 3.50 Fixed selling expense $ 0.85 Fixed administrative expense $ 0.55 Sales commissions $ 0.65 Variable administrative expense $ 0.55 If 6,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to: Multiple Choice A. $23,400 B. $22,620 C. $18,460 D. $18,200
Schonhardt Corporation's relevant range of activity is 2,900 units to 7,500 units. When it produces and sells 5,200 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 3.40 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 3.50 Fixed selling expense $ 0.85 Fixed administrative expense $ 0.55 Sales commissions $ 0.65 Variable administrative expense $ 0.55 If 6,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to: Multiple Choice A. $23,400 B. $22,620 C. $18,460 D. $18,200
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Schonhardt Corporation's relevant range of activity is 2,900 units to 7,500 units. When it produces and sells 5,200 units, its average costs per unit are as follows:
| Average Cost per Unit |
|||
| Direct materials | $ | 7.20 | |
| Direct labor | $ | 3.40 | |
| Variable manufacturing |
$ | 1.25 | |
| Fixed manufacturing overhead | $ | 3.50 | |
| Fixed selling expense | $ | 0.85 | |
| Fixed administrative expense | $ | 0.55 | |
| Sales commissions | $ | 0.65 | |
| Variable administrative expense | $ | 0.55 | |
If 6,500 units are produced, the total amount of fixed
Multiple Choice
A. $23,400
B. $22,620
C. $18,460
D. $18,200
Expert Solution
Step 1
Fixed manufacturing overhead are those overhead which remain fixed ir-respective the level of production. there amount does not change due to change in production units.
Correct answer is option D working is as follows:
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