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 UnitDirect materials$5.40Direct labor$3.55Variable manufacturing overhead$1.70Fixed manufacturing overhead$3.00Fixed selling expense$0.60Fixed administrative expense$0.40Sales commissions$1.00Variable administrative expense$0.40If 5,000 units are produced, the total amount of manufacturing overhead cost is closest to:
A. $19,250
B. $20,500
C. $23,000
D. $18,000
Answer: B
Business
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