Bellucci Corporation has provided the following information:
Cost per Unit | Cost per Period | |||||
Direct materials | $ | 6.90 | ||||
Direct labor | $ | 3.90 | ||||
Variable manufacturing overhead | $ | 1.40 | ||||
Fixed manufacturing overhead | $ | 102,850 | ||||
Sales commissions | $ | 1.00 | ||||
Variable administrative expense | $ | 0.70 | ||||
Fixed selling and administrative expense | $ | 37,400 | ||||
The incremental manufacturing cost that the company will incur if it increases production from 8,500 to 8,501 units is closest to (assume that the increase is within the relevant range):
ANSWER=
The Incremental Manufacturing cost -will be equal to the Variable Manufacturing cost per unit because these costs are changes from decision to produce extra unit, and Fixed are not changes with Actual production of units.
Also,Incremental costs is that Extra cost that the company incurr for its manufacturing an Additional Quantity of units.
Explanation for Incremental Mfg. costs in aforementioned question are:-
Direct Material = $6.90
Direct Labour = $3.90
Variable manufacturing Overhead = $1.40
TOTAL = $12.20(ANSWER)
Therefore:-
Total Incremental Manufacturing cost for additional one unit is $12.20.
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