Perteet Corporation's Relevant Range of Activity Is 3,000 Units to 7,000

question 164

Multiple Choice

Perteet Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units,its average costs per unit are as follows:
If 4,000 units are produced,the total amount of manufacturing overhead cost is closest to:

• A) $18,100
• B) $28,000
• C) $21,400
• D) $14,800

---

Definitions:

Overhead Cost

General operating costs not directly tied to a specific product or service, including utilities, rent, and administrative salaries.

Order Filling

The process of completing customer orders, including picking, packing, and shipping the requested items.

Activity-Based Costing

Activity-based costing is an accounting method that assigns costs to products or services based on the activities required to produce them, aiming to provide more accurate product costing.

First Stage Allocations

The initial process of assigning overhead costs to different departments or cost pools in activity-based costing.