Question

Daysmy41 Corporation has provided the following production and average cost data for two levels of monthly...

Daysmy41 Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. Production volume 7,000 units 8,000 units Direct materials \$ 82.90 per unit \$ 82.90 per unit Direct labor \$ 58.20 per unit \$ 58.20 per unit Manufacturing overhead \$ 74.20 per unit \$ 69.20 per unit The best estimate of the total cost to manufacture 7,400 units is closest to: (Round your intermediate calculations to 2 decimal places.)

>> Manufacturing cost is semi variable item.

>> Total Manufacturing cost at 7000 Units = 7000 * \$ 74.2 = \$ 519,400.

>> Total Manufacturing cost at 8000 Units = 8000 * \$ 69.2 = \$ 553,600.

>> Variable manufacturing cost = ( \$ 553,600 - \$ 519,400 ) / ( 8000 - 7000 ) = \$ 34.2.

>> Fixed Manufacturing cost = \$ 519,400 - ( 7000 * \$ 34.2 )

>> Fixed Manufacturing cost = \$ 280,000.

>> Total variable cost = \$ 82.9 + \$ 58.20 + \$ 34.2

>> Total variable cost = \$ 175.30

>> Total cost at 7400 Units = Variable cost + Fixed cost

>> Total cost at 7400 Units = ( 7400 * \$ 175.3 ) + \$ 280,000

>> Total cost at 7400 Units = \$ 1,577,220.