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

*The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 5,200 units.

Total variable manufacturing overhead cost($1.25 per unit x 4,200 units) $5,250 Total fixed manufacturing overhead cost($3.50 per unit x 5,200 units*) $18,200 Total indirect manufacturing cost $23,450

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