Faram Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total cost to manufacture 2,300 units is closest to:
A)$446,660
B)$465,840
C)$462,415
D)$478,170

Question

Faram Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product.  The best estimate of the total cost to manufacture 2,300 units is closest to:
A)$446,660 
B)$465,840 
C)$462,415 
D)$478,170

Quizplus · Accepted Answer

To calculate the variable manufacturing cost per unit:
 11eaaee8_6799_58ac_933a_e1640c1bdddd_TB5186_00 Variable manufacturing overhead cost = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($151,800 - $128,600) F1F1F1S1F1F1F10 (3,000 - 2,000) = $23.20
Fixed cost element of manufacturing overhead = Total cost - Variable cost element
= $151,800 - ($23.20 F1F1F1S1F1F1F10 3,000) = $82,200
 11eaaee8_6799_7fbd_933a_fff02c446f2c_TB5186_00 * $262,500 F1F1F1S1F1F1F10 3,000 units = $87.50 per unit
** $168,300 F1F1F1S1F1F1F10 3,000 units = $56.10 per unit

Faram Corporation Has Provided the Following Production and Total Cost