Question

Martinez company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average cost per unit are as follows

direct materials $6.40
direct labor $3.90
variable manufacturing overhead $1.40
fixed manufacturing overhead $4.00
fixed selling expense $3.40
fixed administrative expense $2.10
sales commission $1.10
variable administrative expenses $0.55

11) if 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?

total manufacturing over head cost-
manufacturing overhead per unit-

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?

total manufacturing overhead cost-
manufacturing overhead unit-

13) if selling price is $22.40 per unit, what is the contribution margin per unit?

contribution margin per unit-

14) if 12,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production?

total direct manufacturing cost-
total indirect manufacturing cost-

Answer 1

	Fixed overheads (4*10000)	40000
11	8000 units	Amount
	Variable overheads	11200	(8000*1.40)
	Fixed overheads	40000
	Total manufacturing overheads	51200
	Number of units	8000
	Cost per unit	6.4
12	12500 units	Amount
	Variable overheads	17500	(12500*1.40)
	Fixed overheads	40000
	Total manufacturing overheads	57500
	Number of units	8000
	Cost per unit	7.1875
13	Variable cost	Per unit
	Direct material	6.4
	Direct labor	3.9
	Variable manufacturing overheads	1.4
	Sales commission	1.1
	Variable administrative expense	0.55
	Total variable expense	13.35
	Sales per unit	22.4
	Variable cost per unit	13.35
	Contribution margin per unit	9.05
14	Direct overheads	Amount
	Direct material	76800	(6.4*12000)
	Direct labor	46800	(3.9*12000)
	Total direct manufacturing overheads	123600
	Indirect overheads	Amount
	Variable overheads	16800	(12000*1.40)
	Fixed overheads	40000
	Total manufacturing overheads indirect	56800