Answer the following questions using the information below:
Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for 1,000 tables apply for sales to regular customers:
$\begin{array}{lr}
\text { Direct materials } & \$ 50 \
\text { Direct manufacturing labor } & 10 \
\text { Variable manufacturing overhead } & 15 \
\text { Fixed manufacturing overhead } & \underline{30} \
{\text { Total manufacturing costs }} & \$ 105
\end{array}$
-The plant has capacity for 3,000 tables and is considering expanding production to 3,000 tables.What is the total cost of producing 3,000 tables?
A) $255,000
B) $225,000
C) $175,000
D) $235,000

Question

Answer the following questions using the information below:
Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for 1,000 tables apply for sales to regular customers:
 $\begin{array}{lr}
\text { Direct materials } & \$ 50 \
\text { Direct manufacturing labor } & 10 \
\text { Variable manufacturing overhead } & 15 \
\text { Fixed manufacturing overhead } & \underline{30} \
{\text { Total manufacturing costs }} & \$ 105
\end{array}$
-The plant has capacity for 3,000 tables and is considering expanding production to 3,000 tables.What is the total cost of producing 3,000 tables?
A) $255,000
B) $225,000
C) $175,000
D) $235,000

Quizplus · Accepted Answer

Total manufacturing costs = $105 per unit x 3,000 units = $315,000. However, since fixed manufacturing overhead is not affected by the change in production, the total cost of producing 3,000 tables is $315,000 - ($30 x 2,000) = $255,000.

Answer the Following Questions Using the Information Below: Buildz Manufacturing

Answer the Following Questions Using the Information Below:
Buildz Manufacturing