A companyproduces a single product. The following volume and average costdata for two accounting periods have been provided bymanagement:
|
Number ofunits............................
|
500
|
800
|
|
Directmaterials.............................
|
$2.00
|
$2.00
|
|
Directlabor....................................
|
$1.50
|
$1.50
|
|
Manufacturingoverhead...............
|
$2.50
|
$1.75
|
|
Otheroverhead..............................
|
$1.00
|
$0.625
|
The best estimate for the cost formula for the total cost ofproducing and selling the product (where X is the number of unitsproduced and sold in a period) is:
A) $1,000 + $1.125 X
B) $1,000 + $3.50 X
C) $1,500 + $3.50 X
D) $1,500 + $4.00 X