Grip Manufacturing currently produces 1,000 tires per month.The following per unit data for 1,000 tires apply for sales to regular customers: $$\begin{array} { l r }
\text { Direct materials } & \$ 30 \
\text { Direct manufacturing labor } & 5 \
\text { Variable manufacturing overhead } & 8 \
\text { Fiæed manufacturing overhead } & \underline { 12 } \
\text { Total manufacturing costs } & \underline { \$ 55 }
\end{array}$$ The plant has capacity for 3,000 tires and is considering expanding production to 2,000 tires.What is the total cost of producing 2,000 tires?
A) $110,000
B) $98,000
C) $68,000
D) $88,000

Question

Grip Manufacturing currently produces 1,000 tires per month.The following per unit data for 1,000 tires apply for sales to regular customers: $$\begin{array} { l r } 
\text { Direct materials } & \$ 30 \
\text { Direct manufacturing labor } & 5 \
\text { Variable manufacturing overhead } & 8 \
\text { Fiæed manufacturing overhead } & \underline { 12 } \
\text { Total manufacturing costs } & \underline { \$ 55 }
\end{array}$$ The plant has capacity for 3,000 tires and is considering expanding production to 2,000 tires.What is the total cost of producing 2,000 tires?
A) $110,000
B) $98,000
C) $68,000
D) $88,000

Quizplus · Accepted Answer

The Answer of Grip Manufacturing currently produces 1,000 tires per month.The following per unit data for 1,000 tires apply for sales to regular customers: $$\begin{array} { l r } 
\text { Direct materials } & \$ 30 \
\text { Direct manufacturing labor } & 5 \
\text { Variable manufacturing overhead } & 8 \
\text { Fiæed manufacturing overhead } & \underline { 12 } \
\text { Total manufacturing costs } & \underline { \$ 55 }
\end{array}$$ The plant has capacity for 3,000 tires and is considering expanding production to 2,000 tires.What is the total cost of producing 2,000 tires?
A) $110,000
B) $98,000
C) $68,000
D) $88,000

Grip Manufacturing Currently Produces 1,000 Tires Per Month The Plant Has Capacity for 3,000 Tires and Is Considering