Total manufacturing overhead at 5,000 units = 5,000 units × $60.30 per unit = $301,500 Total manufacturing overhead at 4,000 units = 4,000 units × $70.50 per unit = $282,000 Variable manufacturing overhead per unit = Change in cost ÷ Change in activity = ($301,500 - $282,000) ÷ (5,000 units - 4,000 units) = $19,500 ÷ 1,000 units = $19.50 per unit Total variable manufacturing cost = Direct materials + Direct labor + Variable manufacturing overhead = $89.70 per unit + $22.60 per unit + $19.50 per unit = $131.80 per unit AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Learning Objective: 02-03 Understand cost behavior patterns including variable costs; fixed costs; and mixed costs. Learning Objective: 02-04 Analyze a mixed cost using a scattergraph plot and the high-low method. Level: 3 Hard 65. Carbaugh Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the cost to manufacture 3,300 units is closest to:
Total manufacturing overhead at 5,000 units = 5,000 units × $60.30 per unit = $301,500 Total manufacturing overhead at 4,000 units = 4,000 units × $70.50 per unit = $282,000 Variable manufacturing overhead per unit = Change in cost ÷ Change in activity = ($301,500 - $282,000) ÷ (5,000 units - 4,000 units) = $19,500 ÷ 1,000 units = $19.50 per unit Total variable manufacturing cost = Direct materials + Direct labor + Variable manufacturing overhead = $89.70 per unit + $22.60 per unit + $19.50 per unit = $131.80 per unit AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Blooms: Apply Learning Objective: 02-03 Understand cost behavior patterns including variable costs; fixed costs; and mixed costs. Learning Objective: 02-04 Analyze a mixed cost using a scattergraph plot and the high-low method. Level: 3 Hard 65. Carbaugh Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the cost to manufacture 3,300 units is closest to:
Test%20Bank%20for%20Managerial%20Accounting%20for%20Managers%203rd%20Edition%20Noreen,%20Brewer,%20Garrison.docx