Dabbs Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total monthly fixed manufacturing cost is:
A)$737,950
B)$686,400
C)$274,000
D)$789,500

Question

Dabbs Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product.  The best estimate of the total monthly fixed manufacturing cost is:
A)$737,950 
B)$686,400 
C)$274,000 
D)$789,500

Quizplus · Accepted Answer

To calculate the variable manufacturing cost per unit:
 11eaaee8_6798_e379_933a_bf24cca58616_TB5186_00 Variable manufacturing overhead cost = Change in cost F1F1F1S1F1F1F10 Change in activity = ($358,000 - $341,200) F1F1F1S1F1F1F10 (5,000 - 4,000) = $16.80
Fixed cost element of manufacturing overhead = Total cost - Variable cost element = $358,000 - ($16.80 F1F1F1S1F1F1F10 5,000) = $274,000

Dabbs Corporation Has Provided the Following Production and Total Cost