BDI Corporation’s relevant range of activity is 3,000 units…
BDI 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: Average Cost per Unit Direct materials $ 6.05 Direct labor $ 3.05 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.40 Sales commissions $ 1.00 Variable administrative expense $ 0.50 The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to: