QUIZ NAVIGAT Walsh Corporation\'s relevant range of activity is 2,000 units to 6

Question

QUIZ NAVIGAT Walsh Corporation's relevant range of activity is 2,000 units to 6,000 units When t produces and sells 4,000 units, its average costs per unit are as Finish attempt Average Cost per Unit Direct materials Direct labor Varlable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense S 6.55 $3.50 s 1.25 $3.00 $ 0.50 $0.40 s1.50 $0 40 If 5,000 units are produced, the average fixed manufacturing cost per unit produced is closest to Select one O a $3.00 ? b. S240 ° C $2.70 O d $3 75

Explanation / Answer

Calculation of fixed manufacturing cost per unit:

Total fixed manufacturing cost at 4000 units= 4000*3=$12000

Fixed manufacturing cost per unit at 5000 units= total fixed manufacturing cost/units= 12000/5000=$2.40

So correct answer is b) $2.40

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