QUESTION 8 Fasheh Corporation\'s relevant range of activity is 7,000 units to 11

Question

QUESTION 8 Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense $ 5.50 $3.90 $1.30 $ 13.50 $2.25 $1.80 $0.50 $0.45 If 10,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to O $128,250 O $135,000 $148,500 $121,500

Explanation / Answer

Answer is 2- 135000

fixed manufacturing cost = no. of units produced*fixed manufacturing overhead

fixed manufacturing cost = 10000*13.5 = 135000

fixed manufacturing cost = 135000

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