Dake Corporation\'s relevant range of activity is 4,000 units to 8,000 units. Wh

Question

Dake Corporation's relevant range of activity is 4,000 units to 8,000 units. When it produces and sells 6,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $7.15 $3.40 $1.95 $3.20 $0.85 $0.55 $0.65 $0.55 For financial reporting purposes, the total amount of product costs incurred to make 6,000 units is closest to:

Explanation / Answer

Answer a. $94,200 Direct Materials - 6,000 Units X $7.15    42,900.00 Direct Labor - 6,000 Units X $3.40    20,400.00 Variable MOH - 6,000 Units X $1.95    11,700.00 Fixed MOH - 6,000 Units X $3.20    19,200.00 Total Product Costs    94,200.00

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