Questions: Perteet Corporation's relevant range of activity is 8,700 units to 16,500 units. When it produces and sells 12,500 units, its average costs per unit are as follows: Direct materials Average Cost Direct labor per Unit Variable manufacturing overhead 7.90 Fixed manufacturing overhead 1.95 Fixed selling expense 3.80 Fixed administrative expense 0.75 Sales commissions 0.45 Variable administrative expense 0.55 0.60 If 10,200 units are produced, the total amount of manufacturing overhead cost is closest to: Multiple Choice 44,460 79,470

Perteet Corporation's relevant range of activity is 8,700 units to 16,500 units. When it produces and sells 12,500 units, its average costs per unit are as follows: Direct materials Average Cost Direct labor per Unit Variable manufacturing overhead 7.90 Fixed manufacturing overhead 1.95 Fixed selling expense 3.80 Fixed administrative expense 0.75 Sales commissions 0.45 Variable administrative expense 0.55 0.60 If 10,200 units are produced, the total amount of manufacturing overhead cost is closest to: Multiple Choice 44,460 79,470
Transcript text: Perteet Corporation's relevant range of activity is 8,700 units to 16,500 units. When it produces and sells 12,500 units, its average costs per unit are as follows: \begin{tabular}{lc} & \\ \hline Direct materials & Average Cost \\ Direct labor & per Unit \\ Variable manufacturing overhead & $\$ 7.90$ \\ Fixed manufacturing overhead & $\$ 1.95$ \\ Fixed selling expense & $\$ 3.80$ \\ Fixed administrative expense & $\$ 0.75$ \\ Sales commissions & $\$ 0.45$ \\ Variable administrative expense & $\$ 0.55$ \\ & $\$ 0.60$ \end{tabular} If 10,200 units are produced, the total amount of manufacturing overhead cost is closest to: Multiple Choice \$44,460 $\$ 79,470$
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Solution

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Solution Steps

Step 1: Calculate Total Variable Manufacturing Overhead

The total variable manufacturing overhead cost when producing \( 10,200 \) units is calculated as follows:

\[ \text{Total Variable Manufacturing Overhead} = \text{Variable Cost per Unit} \times \text{Units Produced} = 7.90 \times 10,200 = 80,580 \]

Step 2: Calculate Total Fixed Manufacturing Overhead

The total fixed manufacturing overhead cost remains constant within the relevant range. It is calculated based on the average fixed cost per unit at the production level of \( 12,500 \) units:

\[ \text{Total Fixed Manufacturing Overhead} = \text{Fixed Cost per Unit} \times \text{Units at 12,500} = 1.95 \times 12,500 = 24,375 \]

Step 3: Calculate Total Manufacturing Overhead

The total manufacturing overhead cost is the sum of the total variable and total fixed manufacturing overhead costs:

\[ \text{Total Manufacturing Overhead} = \text{Total Variable Manufacturing Overhead} + \text{Total Fixed Manufacturing Overhead} = 80,580 + 24,375 = 104,955 \]

Final Answer

The total amount of manufacturing overhead cost when \( 10,200 \) units are produced is

\[ \boxed{104,955} \]

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