Question
Martinez Companys relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows:
Martinez Companys relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows:
Amount Per Unit:
Direct materials $ 5.20 Direct labor $ 2.70 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 3.20 Fixed selling expense $ 2.20 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50
1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?
2. If 12,500 units are sold, what is the variable cost per unit sold? (Round your answer to 2 decimal places.)
3. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?
4-a. If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?
4-b. If 12,500 units are produced, what is this total amount of manufacturing overhead cost expressed on a per unit basis? (Round your answer to 2 decimal places.)
5. What total incremental cost will Martinez incur if it increases production from 10,000 to 10,001 units? (Round your answer to 2 decimal places.)
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