Anderson corporation has provided the following production and average cost data for two levels of monthly production volume. the company produces a single product. production volume 4,000 units 5,000 units direct materials $ 99.20 per unit $ 99.20 per unit direct labor $ 45.50 per unit $ 45.50 per unit manufacturing overhead $ 94.00 per unit $ 77.60 per unit the best estimate of the total monthly fixed manufacturing cost is:

(a) $388,000
(b) $954,800
(c) $376,000
(d) $328,000

Option (D) is correct.

Explanation:

Calculation of total manufacturing overhead:-

4000 units manufacturing overhead:

= Production volume ×  Manufacturing overhead

= 4,000 × $94

= $376,000

5000 units manufacturing overhead:

= Production volume ×  Manufacturing overhead

= 5,000 × $77.60

= $388,000

Variable cost per unit:

= 12

Fixed cost = Total cost - variable cost

                 = $388,000 - 5,000 × 12

                 = $388,000 - $60,000

                 = $328,000

So total monthly fixed manufacturing cost is $328,000.

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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