Mount Company incurred a total cost of $8,600 to produce 400 units of pulp.Each unit of pulp required five (5)direct labor hours to complete.What is the total fixed cost if the variable cost was $1.50 per direct labor hour?

Question

Quizplus · Accepted Answer

Total variable cost = (5 direct labor hours/unit) x ($1.50/direct labor hour) x (400 units) = $3,000

Total cost = Total fixed cost + Total variable cost
$8,600 = Total fixed cost + $3,000
Total fixed cost = $5,600

Mount Company Incurred a Total Cost of $8,600 to Produce