Exercise 18-2 (Part Level Submission) Shingle Enterprises is considering manufac

Question

Exercise 18-2 (Part Level Submission) Shingle Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as shown below Output Rent Direct in Units Expense Materials $6,575 5,260 9,468 8,100 10,800 13,500 16,200 18,900 21,600 38,529 46,025 57,860 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 6,575 10,520 10,520 10,520 10,520 10,520 10,520 13,150 13,150 13,150 (b) Your answer is correct. Determine the relevant range of activity for this product The relevant range of activity for this product T 3,000-8,000 units SHOW SOLUTIONSHOW ANSWER

Explanation / Answer

Variable cost per unit = 8100/3000= 2.7

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