ABC Manufacturing currently produces 1,500 units per month

Accounting Nov 12, 2020

ABC Manufacturing currently produces 1,500 units per month. The following per unit data apply for sales to regular customers: Direct materials used $ 401 Direct labor $ 6 $12 Variable manufacturing overhead Fixed manufacturing overhead $20 Fi Total manufacturing costs $78 THE Selling & Administrative expenses $ 22 Total costs $ 100 The plant has capacity for 2,000 units and is considering expanding production to 1.800 units. What is the total cost of producing 1.800 units Select one: a. $ 180,000 b. $ 140,400 c. $ 156.000 O d. $ 184,400

Expert Solution

Statement Showing Production Cost

1800 Units

Direct Material Used ($40 × 1800 units)		$72,000
Direct Labor ($6 × 1800 units)		$10,800
Variable Manufacturing overhead ($12 × 1800 units)		$21,600
Fixed Manufacturing Cost ($20 × 1500)		$30,000
Total Cost Of Producing		$ 134,400

Option D is Correct.

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