BarGraphs Corp. had capacity to produce 4,000

units of L3 using 20,000 kg of direct materials. BarGraphs produced 3,650

units of L3 by processing 17,500 kg of direct materials. Conversion cost per unit is $11.00.

BarGraphs can add or reduce manufacturing capacity in increments of 2,500 kgs.

What is the cost of unused capacity for conversion costs of BarGraphs ?

A.

$5,500

B.

$3,850

C.

$2,200

D.

$ 2500