MFG Company experiences the following cost behavior patterns each week: Fixed co
ID: 2516003 • Letter: M
Question
MFG Company experiences the following cost behavior patterns each week: Fixed costs: supervisor’s salary $2,600; factory rent $5,700 Mixed costs: utilities $3,100 + $9.25 per unit Variable costs per unit: manufacturing labor wages $28.00; supplies used in production $12.50; packaging cost $6.25; warranty cost $4
Required: Compute total costs to be incurred for a week with 2,910 units of activity. (Do not round intermediate calculations.)
MFG Company experiences the following cost behavior patterns each week: Fixed costs: supervisor's salary $2,600, factory rent $5,700 Mixed costs: utilities $3,100S9.25 per unit Variable costs per unit manufacturing labor wages $28.00, supplies used in production $12.50, packaging cost $6.25, warranty cost $4 Required: Compute total costs to be incurred for a week with 2,910 units of activity. (Do not round intermediate calculations.) Total costExplanation / Answer
Cost formula:
Total cost = Fixed cost + Variable cost
= ($2,600 + 5,700 + 3,100) + ($9.25 + 28.00 + 12.50 + 6.25 + 4.00) per unit
= $11,400 + $60 per unit
Total cost expected for 2,910 units of activity:
Total cost = $11,400 + ($60 × 2,910 units)
= $11,400 + 174,600
= $186,000
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