Question
Montero Industries' relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,600 units, its average costs per unit are
Montero Industries' relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,600 units, its average costs per unit are as follows:
Required:
a. For financial reporting purposes, what is the total amount of product costs incurred to make 5,600 units?
b. For financial reporting purposes, what is the total amount of period costs incurred to sell 5,600 units?
c. If 6,600 units are sold, what is the variable cost per unit sold?
d. If 6,600 units are sold, what is the total amount of variable costs related to the units sold?
e. If 6,600 units are produced, what is the average fixed manufacturing cost per unit produced?
f. If 6,600 units are produced, what is the total amount of fixed manufacturing cost incurred?
g. If 6,600 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis?
h. If the selling price is $23.00 per unit, what is the contribution margin per unit sold?
i. If 4,600 units are produced, what is the total amount of direct manufacturing cost incurred?
j. If 4,600 units are produced, what is the total amount of indirect manufacturing cost incurred?
k. What incremental manufacturing cost will the company incur if it increases production from 5,600 to 5,601 units?
Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $ 5.50 $ 3.65 $ 1.80 $ 3.60 $ 0.80 $ 0.65 $ 0.55 $ 0.55 a. Total product cost b. Total period cost c. Variable cost per unit sold d. Total variable costs e. Average fixed manufacturing cost per unit produced f. Total fixed manufacturing overhead cost g. Total manufacturing overhead cost g. Manufacturing overhead per unit h. Contribution margin per unit i. Total direct manufacturing cost j. Total indirect manufacturing cost k. Incremental manufacturing costStep by Step Solution
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