Dake Corporation\'s relevant range of activity is 2,900 units to 7,500 units. Wh

Question

Dake 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: 2.27 points Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $6.50 $3.40 $1.25 $3.50 $0.85 $0.55 $0.65 $0.55 If 4.200 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Explanation / Answer

Variable manufacturing overhead 5250 =4200*1.25 Fixed manufacturing overhead 18200 =5200*3.5 Total amount of indirect manufacturing overhead 23450 Note: Fixed manufacturing overhead will be same within the relevant range

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