Dake Corporations relevant range of activity is 4100 units t

Dake Corporation\'s relevant range of activity is 4,100 units to 9,500 units. When it produces and sells 6,800 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $6.70 $3.80 $1.45 $2.50 $1.05 $0.75 $0.85 $0.75 If 5,800 units are produced, the total amount of direct manufacturing cost incurred is closest to:

Solution

Total amount of direct mfg cost = 5800*(6.70+3.80) = $      60,900 Direct mfg cost includes all costs that can be traced to the units of products. It includes direct labor and direct labor.