Perteet Corporation\'s relevant range of activity is 7,500 units to 14,500 units

Question

Perteet Corporation's relevant range of activity is 7,500 units to 14,500 units. When it produces and sells 11,000 units, its average costs per unit are as follows:

If 8,000 units are produced, the total amount of manufacturing overhead cost is closest to:

rev: 09_27_2017_QC_CS-102296

Multiple Choice

$31,500

$59,950

$45,000

$26,950

Average
Cost per Unit Direct materials $ 7.60 Direct labor $ 3.85 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.85 Fixed administrative expense $ 0.55 Sales commissions $ 0.65 Variable administrative expense $ 0.70

Explanation / Answer

C. $45,000

Total manufacturing overhead cost = Total variable manufacturing overhead cost + Total fixed manufacturing overhead cost

Total manufacturing overhead cost = ($1.50 per unit x 8,000 units) + ($3.00 per unit x 11,000 units)

Total manufacturing overhead cost = $45,000

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