Company XYZ produced 1,000 units of product A. Atthis level, the variable manufacturing costs wereOMR240,000 and the variable selling andadministrative costs were OMR80,000. Furthermore,the total fixed cost was OMR110,000. Assuming thecompany increased the production level to 1,020 units,what would be the increase in total manufacturingcosts?Select one:O a. OMR7,000O b. OMR6,400C OMR4,800O d. OMR8,600O e. None of the given answersYZ Corpany uses a job cesting system andapplesanufacturing overheadusinepredetemined

Answered: Select one: O a. OMR7,000 O b. OMR6,400…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EB: Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following...

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Company XYZ produced 1,000 units of product A. At
this level, the variable manufacturing costs were
OMR240,000 and the variable selling and
administrative costs were OMR80,000. Furthermore,
the total fixed cost was OMR110,000. Assuming the
company increased the production level to 1,020 units,
what would be the increase in total manufacturing
costs?
Select one:
O a. OMR7,000
O b. OMR6,400
C OMR4,800
O d. OMR8,600
O e. None of the given answers
YZ Corpany uses a job cesting system andapples
anufacturing overheadusinepredetemined

Expert Solution

Step 1

Definition:

Manufacturing cost: The cost which is related to the production is known as manufacturing cost. Examples are raw materials and depreciation expenses on machinery.

Step 2

Identify the correct answer.

Working note:

Calculate the variable cost per unit.

From the above calculation, it is clear that option b is the correct answer.

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