Biology Forums - Study Force

Varela 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	$ 5.95
Direct labor	$ 3.30
Variable manufacturing overhead	$ 1.60
Fixed manufacturing overhead	$ 3.00
Fixed selling expense	$ 0.50
Fixed administrative expense	$ 0.40
Sales commissions	$ 1.50
Variable administrative expense	$ 0.50

For financial reporting purposes, the total amount of product costs incurred to make 4,000 units is closest to:

▸ $43,400

▸ $55,400

▸ $59,400

▸ $12,000

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