Question

Learned Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 5.10 Direct labor $ 4.30 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 36,000 Sales commissions $ 0.80 Variable administrative expense $ 0.70 Fixed selling and administrative expense $ 12,600 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 9,000 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 9,000 units? c. If the selling price is $23.90 per unit, what is the contribution margin per unit sold? (Round your answer to 2 decimal places.) d. If 10,000 units are produced, what is the total amount of direct manufacturing cost incurred? e. If 10,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

Answer 1

a. For financial reporting purposes, what is the total amount of product costs incurred to make 9,000 units?

Description	Cost per Unit	Cost per Period	9,000 Units
Direct Materials	$               5.10		$     45,900.00
Direct Labour	$               4.30		$     38,700.00
Variable Manufacturing Overhead	$               1.90		$     17,100.00
Fixed Manufacturing Overhead		$ 36,000.00	$     36,000.00
Sales Commisions	$               0.80		$       7,200.00
Variable administrative expense	$               0.70		$       6,300.00
Fixed selling and administrative expense		$ 12,600.00	$     12,600.00
	$             12.80	$ 48,600.00	$ 1,63,800.00

b. For financial reporting purposes, what is the total amount of period costs incurred to sell 9,000 units?

Description	9,000 Units
Fixed Manufacturing Overhead	$    36,000.00
Fixed selling and administrative expense	$    12,600.00
Total	$    48,600.00

c. If the selling price is $23.90 per unit, what is the contribution margin per unit sold? (Round your answer to 2 decimal places.)

Contribution per unit = Sale price – Variable cost per unit

Contribution per unit = $23.90 - $12.80

Contribution per unit = $11.10

d. If 10,000 units are produced, what is the total amount of direct manufacturing cost incurred?

Description	10,000 Units
Direct Materials	$    51,000.00
Direct Labour	$    43,000.00
Total	$    94,000.00

e. If 10,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

Description	10,000 Units
Variable Manufacturing Overhead	$    19,000.00
Fixed Manufacturing Overhead	$    36,000.00
Total	$    55,000.00