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Problem 9 Martinez Companys relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per

Problem 9

Martinez Companys relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows:

Average Cost per Unit
Direct materials $ 6.00
Direct labor $ 3.50
Variable manufacturing overhead $ 1.50
Fixed manufacturing overhead $ 4.00
Fixed selling expense $ 3.00
Fixed administrative expense $ 2.00
Sales commissions $ 1.00
Variable administrative expense $ 0.50

12. If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis?

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