Question
Balerio Corporation's relevant range of activity is 9,000 units to 14,000 units. When it produces and sells 11,000 units, its average costs per unit are
Balerio Corporation's relevant range of activity is 9,000 units to 14,000 units. When it produces and sells 11,000 units, its average costs per unit are as follows:
Average Cost per UnitDirect materials$7.30Direct labor$3.90Variable manufacturing overhead$2.20Fixed manufacturing overhead$14.10Fixed selling expense$2.65Fixed administrative expense$1.70Sales commissions$0.50Variable administrative expense$0.40
Required:
a. For financial reporting purposes, what is the total amount of product costs incurred to make 11,000 units?(Do not round intermediate calculations.)
b. If 13,000 units are sold, what is the variable cost per unit sold?(Round "Per unit" answer to 2 decimal places.)
c. If 13,000 units are sold, what is the total amount of variable costs related to the units sold?(Do not round intermediate calculations.)
d. If the selling price is $18.90 per unit, what is the contribution margin per unit sold?(Round "Per unit" answer to 2 decimal places.)
e. What incremental manufacturing cost will the company incur if it increases production from 11,000 to 11,001 units?(Round "Per unit" answer to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started