Perteet Corporation\'s relevant range of activity is 3,000 units to 7,000 units.

Question

Perteet Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows:

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Multiple Choice

$28,000

$14,800

$21,400

$18,100

Average
Cost per Unit Direct materials $ 6.70 Direct labor $ 3.25 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.70 Fixed administrative expense $ 0.40 Sales commissions $ 0.50 Variable administrative expense $ 0.55

Explanation / Answer

Total amount of manufacturing overhead cost = (4000*1.6)+(5000*3)= $21400

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