Ouelette 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 6,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
A) $15,000
B) $22,800
C) $7,800
D) $25,800

Question

Ouelette 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 6,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
A) $15,000 
B) $22,800 
C) $7,800 
D) $25,800

Quizplus · Accepted Answer

11eacbfc_c79b_92ff_8ffe_cb43f304cff8_TB7552_00 *The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 5,000 units.

Ouelette Corporation's Relevant Range of Activity Is 3,000 Units to 7,000