Biology Forums - Study Force

Rhome Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$ 5.40
Direct labor	$ 3.55
Variable manufacturing overhead	$ 1.70
Fixed manufacturing overhead	$ 3.00
Fixed selling expense	$ 0.60
Fixed administrative expense	$ 0.40
Sales commissions	$ 1.00
Variable administrative expense	$ 0.40

If 5,000 units are produced, the average fixed manufacturing cost per unit produced is closest to:

▸ $3.75

▸ $2.40

▸ $2.70

▸ $3.00

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