Question & Answer: aker Corporation has provided the following production and…..

Baker Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.
  Production volume 11,800 units 13,000 units
  Direct materials $761,100 $838,500
  Direct labor $241,900 $266,500
  Manufacturing overhead $1,010,800 $1,035,280
The best estimate of the total cost to manufacture 12,200 units is closest to: (Do not round intermediate calculations.)

$2,032,650

$2,055,960

$1,962,720

$2,102,580

Baker Corporation’s has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.

 

  Production volume 5,900 units 6,900 units
  Direct materials $97.70 per unit $97.70 per unit
  Direct labor $26.60 per unit $26.60 per unit
  Manufacturing overhead $79.60 per unit $73.60 per unit

The best estimate of the total variable manufacturing cost per unit is:

$124.30

$182.90

$171.30

$162.50

Expert Answer

Statementshowing Computations
Paticulars 11,800 units cost Per Unit cost 13,000 units cost Per Unit cost
Direct Materials       761,100.00                              64.50          838,500.00                         64.50
Direct Labour       241,900.00                              20.50          266,500.00                         20.50
Manufacturing overhead 1,010,800.00                              85.66       1,035,280.00                         79.64
2,013,800.00                           170.66       2,140,280.00
Difference In Manufacturing overhead = 1035280 – 1010800         24,480.00
No of units = 13000 – 11800           1,200.00
Per Unit cost                 20.40
Fixed Cost = 1010800 – 11800*20.40       770,080.00
Direct materials = 12200*64.50       786,900.00
Direct Labour= 12200 * 20.50       250,100.00
Variable overhead = 12200*20.40       248,880.00
Fixed Overhead       770,080.00
Total cost 2,055,960.00
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