The best estimate of the total cost to manufacture 2,200 units is closest to:

Question

Quizplus · Accepted Answer

Total manufacturing overhead at 2,000 units = 2,000 units × $86.90 per unit = $173,800
Total manufacturing overhead at 4,000 units = 4,000 units × $55.30 per unit = $221,200 11efc757_0c97_9f2a_adf0_cddbcac35bc0_TB2627_00 
Variable cost per unit = Change in cost ÷ Change in activity
= $47,400 ÷ 2,000 units
= $23.70 per unit
Fixed cost = Total cost – Variable cost element
= $221,200 – ($23.70 per unit × 4,000 units)
= $221,200 – $94,800
= $126,400
Total variable cost per unit = Direct materials per unit + Direct labor per unit + variable manufacturing overhead per unit
= $88.40 + $20.60 + $23.70
= $132.70
Total cost = Total fixed cost + Total variable cost
= $126,400 + ($132.70 per unit × 2,200 units)
= $126,400 + $291,940
= $418,340
Reference: APP06A-Ref3
Wilson Corporation's activity for the first six of the current year is as follows:
 11efc757_223c_168b_adf0_b3f4fa43aa06_TB2627_00

The Best Estimate of the Total Cost to Manufacture 2,200