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Rose Company has a relevant range of production between 10,000 and 25,000 units. The following cost data represents average cost per unit for 16,000 units of production.

	Average Cost per Unit
Direct Materials	$12
Direct Labor	9
Indirect Materials	2
Fixed manufacturing overhead	5
Variable manufacturing overhead	3
Fixed selling and administrative expenses	8
Variable sales commissions	25

Using the cost data from Rose Company, answer the following questions:

A. If 10,000 units are produced, what is the variable cost per unit?

Variable cost per unit $

B. If 17,000 units are produced, what is the variable cost per unit?

Variable cost per unit $

C. If 21,000 units are produced, what are the total variable costs?

Total variable costs $

D. If 12,000 units are produced, what are the total variable costs?

Total variable costs $

E. If 19,000 units are produced, what are the total manufacturing overhead costs incurred?

Total manufacturing overhead costs $

F. If 23,000 units are produced, what are the total manufacturing overhead costs incurred?

Total manufacturing overhead costs $

G. If 19,000 units are produced, what are the per unit manufacturing overhead costs incurred? If required, round final answer to two decimal places.

Manufacturing overhead costs per unit $

H. If 25,000 units are produced, what are the per unit manufacturing overhead costs incurred? If required, round final answer to two decimal places.

Manufacturing overhead costs per unit $

Answer 1

From the given data let us first calculate the variable cost per unit and total fixed cost
Direct materials	12
Direct labor	9
Indirect materials	2
Variable manufacturing overhead	3
Variable sales commission	25
Variable cost per unit	51
Fixed manuacturing overhead ( 16000 * 5 )	80000
Fixed selling and administrative expenses ( 16000 * 8 )	128000
Total fixed expenses	208000

A.
Variable cost per unit	51
B.
Variable cost per unit	51
C.
Total variable cost = Units produced * Variable cost per unit = 21000 * 51	1071000
D.
Total variable costs = Units produced * Variable cost per unit = 12000 * 51	612000
E.
Total manufacturing overhead costs = ( Indirect materials per unit * Units produced ) + ( Variable manufacturing overhead per unit * Units produced ) + Fixed manufacturing overhead = ( 2 * 19000 ) + ( 3 * 19000 ) + 80000	175000
F.
Total manufacturing overhead costs = ( Indirect materials per unit * Units produced ) + ( Variable manufacturing overhead per unit * Units produced ) + Fixed manufacturing overhead = ( 2 * 23000 ) + ( 3 * 23000 ) + 80000	195000
G.
Manufacturing overhead costs per unit = Total manufacturing overhead cost for 19000 units / 19000 = 175000 / 19000	9.21
H.
Total manufacturing overhead cost for 25000 units = ( Indirect materials per unit * Units produced ) + ( Variable manufacturing overhead per unit * Units produced ) + Fixed manufacturing overhead = ( 2 * 25000 ) + ( 3 * 25000 ) + 80000	205000
Manufacturing overhead costs per unit = Total manufacturing overhead cost for 25000 units / 25000 = 205000 / 25000	8.20