Bellucci Corporation has provided the following information: Cost per Unit Cost

Question

Bellucci Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.25 Direct labor $ 3.35 Variable manufacturing overhead $ 1.30 Fixed manufacturing overhead $ 128,000 Sales commissions $ 1.05 Variable administrative expense $ 0.60 Fixed selling and administrative expense $ 47,500 The incremental manufacturing cost that the company will incur if it increases production from 10,000 to 10,001 units is closest to: Multiple Choice $28.15 $11.90 $31.10 $24.70

Explanation / Answer

incremental manufacturing cost that the company will incur=(Direct materials+Direct labor+Variable manufacturing overhead )

which is equal to

=(7.25+3.35+1.30)

which is equal to

=$11.90

The fixed costs do not change with change in units and administrative/selling expenses are not manufacturing costs.

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