Kesterson Corporation has provided the following information: If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:
A) $16,300
B) $25,600
C) $19,400
D) $13,200

Question

Kesterson Corporation has provided the following information:  If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:
A) $16,300 
B) $25,600 
C) $19,400 
D) $13,200

Quizplus · Accepted Answer

Using the given information:
Total variable manufacturing overhead cost = $31,200
Total fixed manufacturing overhead cost = $47,000
Total units produced = 8,000

Therefore, the predetermined overhead rate is:

Predetermined overhead rate = (Total variable manufacturing overhead cost + Total fixed manufacturing overhead cost) / Total units produced
= ($31,200 + $47,000) / 8,000
= $9.65 per unit

To find the total manufacturing overhead cost for 4,000 units produced:

Total manufacturing overhead cost = Predetermined overhead rate x Actual units produced
= $9.65 x 4,000
= $38,600

Therefore, the closest answer choice is (C) $19,400.

Kesterson Corporation Has Provided the Following Information: If 4,000