Kesterson Corporation has provided the following information

Kesterson Corporation has provided the following information: Cost Cost per per Period Unit $7.20 $4.30 $1.60 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense $21,000 $2.20 $0.50 6,000 If7,500 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Solution

Answer is $33,000

Variable Manufacturing Overhead per unit = $1.60
Fixed Manufacturing Overhead = $21,000
Number of units produced = 7,500

Indirect Manufacturing Cost = Variable Manufacturing Overhead per unit * Number of units produced + Fixed Manufacturing Overhead
Indirect Manufacturing Cost = $1.60 * 7,500 + $21,000
Indirect Manufacturing Cost = $33,000