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Dake Corporation's relevant range of activity is 2,200 units to 5,000 units. When it produces and sells 3,600 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.85 Direct labor $ 2.80 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.90 Fixed administrative expense $ 0.60 Sales commissions $ 0.70 Variable administrative expense $ 0.60 If 2,600 units are produced, the total amount of direct manufacturing cost incurred is closest to:

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Answer:

Total direct manufacturing cost= $25,090

Explanation:

Giving the following information:

Production 3,600 units:

Direct materials $6.85

Direct labor $2.80

The direct manufacturing costs are direct material and direct labor.

To calculate the total direct manufacturing cost, we need to use the following formula:

Total direct manufacturing cost= 2,600*(6.85 + 2.8)

Total direct manufacturing cost= $25,090

Because the number of units is between the relevant range, the average variable cost per unit remains constant.

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