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Fiori Corporation's relevant range of activity is 4900 units to 5500 units. When it produces and sells 5250 units, its average costs per unit are
Fiori Corporation's relevant range of activity is 4900 units to 5500 units. When it produces and sells 5250 units, its average costs per unit are as follows:
Average Cost | ||
per Unit | ||
Direct materials | $ | 7 |
Direct labor | $ | 3 |
Variable manufacturing overhead | $ | 2 |
Fixed manufacturing overhead | $ | 3 |
Fixed selling expense | $ | 1.35 |
Fixed administrative expense | $ | 1.25 |
Sales commissions | $ | 1.7 |
Variable administrative expense | $ | 1.2 |
8. What is the incremental (additional) non-manufacturing cost the company will incur if it increases production from 5,250 to 5,251 units?
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