Question

Martinez Company’s relevant range of production is 7,900 units to 12,900 units. When it produces and sells 10,400 units, its unit costs are as follows:

	Amount Per Unit
Direct materials	$	6.60
Direct labor	$	4.10
Variable manufacturing overhead	$	1.50
Fixed manufacturing overhead	$	4.60
Fixed selling expense	$	3.60
Fixed administrative expense	$	2.00
Sales commissions	$	1.00
Variable administrative expense	$	0.50

Required:
1.	For financial accounting purposes, what is the total amount of product costs incurred to make 10,400 units?

2.	For financial accounting purposes, what is the total amount of period costs incurred to sell 10,400 units

3.	If 8,400 units are sold, what is the variable cost per unit sold? (Round your answer to 2 decimal places.)

4.	If 12,900 units are sold, what is the variable cost per unit sold? (Round your answer to 2 decimal places.)

5.	If 8,400 units are sold, what is the total amount of variable costs related to the units sold?

6.	If 12,900 units are sold, what is the total amount of variable costs related to the units sold?

7.	If 8,400 units are produced, what is the average fixed manufacturing cost per unit produced? (Round your answer to 2 decimal places.)

8.	If 12,900 units are produced, what is the average fixed manufacturing cost per unit produced? (Round your answer to 2 decimal places.)

9.	If 8,400 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

10.	If 12,900 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

      

11-a.

If 8,400 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?

            
  

11-b.

If 8,400 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis? (Round your answer to 2 decimal places.)

12-a.

If 12,900 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?

                

12-b.

If 12,900 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis? (Round your answer to 2 decimal places.

13.	If the selling price is $22.60 per unit, what is the contribution margin per unit sold? (Round your answer to 2 decimal places.)

14-a.

If 11,400 units are produced, what are the total amount of direct manufacturing costs incurred to support this level of production

     

14-b.

If 11,400 units are produced, what are the total amount of indirect manufacturing costs incurred to support this level of production?

15.	What total incremental cost will Martinez incur if it increases production from 10,400 to 10,401 units? (Round your answer to 2 decimal places.)

Answer 1

Note - it is clearly indicated that cost of production is not include administration expenses ..hence while calculated product cost admin cost is not consider...but for selling cost it shall include

1)Total amount of product cost for 10400 unit

Dir.mat 10400*6.6=68640

Dir lab 4.1*10400=42640

Var.manu.1.5*10400=15600

Fix manu.4.6*10400=47840

Total product cost=174720

2)period cost for sale 10400 product =

Total product cost =174720

+fix admin. =2*10400=20800

Var .admin 0.5*10400=5200

+ sales commission.1*10400=10400

+fixed selling exp.60*10400=37440

So total period cost=248560$

3)if sold 8400 then per unit variable cost=dir mat+dir labour+vari manu overhead+var.admin.+sell commission

=6.6+4.10+1.5+1+0.5=13.7

4)if 12900 unit sold then also variable cost per unit is equal as in (3) part because variable cost per unit does not vary with change in unit quantity....hence 13.7 $

5)total variable amount of unit sold for 8400 unit is 13.7 *8400=115080 $

6)total variable cost of sell 12900 unit is 13.7 *12900=176730 $

In above point (5) & (6) 13.7 is calculated as per point 3) & 4)

7)fixed manufacutring cost per unit is 4.6 for8400 unit

8)fixed manufacutring cost per unit is 4.6 .also same for 12900 unit

9) if 8400 unit produced.the total fixed amount of production is 4.6*10400=47840

10) if 12900 unit produced.the total fixed amount of production is also 4.6*10400=47840

Because total fixed cost do not change while changing in level of production hence it is same as in point( 1)