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

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

Explanation:

For 4000 units, The direct materials cost is $99.2 per unit, the direct labor cost is $45.5 per unit, the manufacturing overhead cost is $94.

For 5000 units, The direct materials cost is $99.2 per unit, the direct labor cost is $45.5 per unit, the manufacturing overhead cost is $77.6.

Total manufacturing overhead for 4,000 units

=

= $376,000

Total manufacturing overhead for 5,000 units

=

= $388,000

The variable cost per unit

=

= $12 per unit

Fixed costs

= Total cost - Total variable costs

=

= $328,000

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