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Dake Corporation's relevant range of activity is 2,000 units to 5,000 units. When it produces and sells 3,500 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials $6.75
Direct labor $3.90
Variable manufacturing overhead $1.50
Fixed manufacturing overhead $4.00
Fixed selling expense $1.10
Fixed administrative expense $0.80
Sales commissions $0.90
Variable administrative expense $0.80
Question 1: If 2,500 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
Multiple Choice
Option 1: $3,750
Option 2: $14,000
Option 3: $17,750
Option 4: $13,750
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