Question

LUGLA My WUIL Required information [The following information applies to the questions displayed below.) 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 costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $6.70 $ 4.20 $1.40 $4.00 $3.70 $2.10 $1.10 $0.55 1. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? Vhat is this total amount expressed on a per unit basis? (Round your "per unit" answer to 2 decimal places and other answers to the earest whole dollar amount.) Total manufacturing overhead cost Manufacturing overhead per unit $ 1 $ 43,200 5.40

Answer 1

Solution:

Total manufacturing overhead at 8000 units = Variable overhead + Fixed overhead

= (8000*$1.40) + (10000*$4) = $51,200

Manufacturing overhead per unit = $51,200 / 8000 = $6.40 per unit