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Dake Corporation's relevant range of activity is 2,600 units to 7,000 units. When it produces and sells 4,800 units, its average costs per unit are

Dake Corporation's relevant range of activity is 2,600 units to 7,000 units. When it produces and sells 4,800 units, its average costs per unit are as follows:

Average Cost per Unit
Direct materials $ 6.45
Direct labor $ 3.30
Variable manufacturing overhead $ 1.20
Fixed manufacturing overhead $ 2.50
Fixed selling expense $ 0.80
Fixed administrative expense $ 0.50
Sales commissions $ 0.60
Variable administrative expense $ 0.50

If 3,800 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Multiple Choice

  • $14,060

  • $16,560

  • $12,000

  • $4,560

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