Dandenong Tyre Company currently produces 1000 tyres per month.The following per unit data apply for sales to regular customers:
$$\begin{array} { l r }
\text { Direct materials } & \$ 20 \
\text { Direct manufacturing labour } & 3 \
\text { Variable manufacturing overhead } & 6 \
\text { Fixed manufacturing overhead } & \underline { 10 } \
\text { Total manufacturing costs } & \$ 39
\end{array}$$
The plant has capacity for 3000 tyres and is considering expanding production to 2000 tyres.What is the total cost of producing 2000 tyres?
A)$78 000
B)$62 000
C)$68 000
D)$39 000

Question

Dandenong Tyre Company currently produces 1000 tyres per month.The following per unit data apply for sales to regular customers:
$$\begin{array} { l r } 
\text { Direct materials } & \$ 20 \
\text { Direct manufacturing labour } & 3 \
\text { Variable manufacturing overhead } & 6 \
\text { Fixed manufacturing overhead } & \underline { 10 } \
\text { Total manufacturing costs } & \$ 39
\end{array}$$
The plant has capacity for 3000 tyres and is considering expanding production to 2000 tyres.What is the total cost of producing 2000 tyres?
A)$78 000
B)$62 000
C)$68 000
D)$39 000

Quizplus · Accepted Answer

The Answer of Dandenong Tyre Company currently produces 1000 tyres per month.The following per unit data apply for sales to regular customers:
$$\begin{array} { l r } 
\text { Direct materials } & \$ 20 \
\text { Direct manufacturing labour } & 3 \
\text { Variable manufacturing overhead } & 6 \
\text { Fixed manufacturing overhead } & \underline { 10 } \
\text { Total manufacturing costs } & \$ 39
\end{array}$$
The plant has capacity for 3000 tyres and is considering expanding production to 2000 tyres.What is the total cost of producing 2000 tyres?
A)$78 000
B)$62 000
C)$68 000
D)$39 000

Dandenong Tyre Company Currently Produces 1000 Tyres Per Month The Plant Has Capacity for 3000 Tyres and Is Considering