Pedregon Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.95 Direct labor $ 3.50 Variable manufacturing overhead $ 1.75 Fixed manufacturing overhead $ 19,800 Sales commissions $ 0.40 Variable administrative expense $ 0.50 Fixed selling and administrative expense $ 7,700 If 4,500 units are produced, the total amount of manufacturing overhead cost is closest to: Multiple Choice $23,625 $35,375 $27,675 $25,875

The correct answer is $27,675.

Explanation:

According to the scenario, the given data are as follows:

Variable manufacturing OH = $1.75

Fixed manufacturing OH = $19,800

Units = 4,500 units

So, we can calculate the total amount of manufacturing overhead cost by using following formula:

Total manufacturing OH = Total variable OH + Total fixed OH

Where, Total variable OH = $1.75 × 4,500 = $7,875

By putting the value, we get

Total Manufacturing OH = $7,875 + $19,800

= $27,675

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