Question

At a volume of 10,000 units, Company P incurs $30,000 in factory overhead costs, including $10,000...

At a volume of 10,000 units, Company P incurs $30,000 in factory overhead costs, including $10,000 in fixed costs. Assuming that this activity is within the relevant range, if volume increases to 12,000 units, Company P would expect to incur total factory overhead costs of:

[[selectone]]

a. $34,000

b. $32,000

c. $36,000

d. $30,000

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Answer #1

Answer :-

P would expect to incur total factory overhead costs of : -

Total Unit Volume 10000 Units
Total Factory Overhead Costs $          30,000.00
Fixed Cost $        (10,000.00)
Variable Cost $          20,000.00
Variable Cost/ Unit $                   2.00
Projected Units 12000 Units
Variable Costs $          24,000.00
Fixed Costs $          10,000.00
Total Factory Overhead Costs $          34,000.00

Correct option is option 1st i.e. $ 34,000.00

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