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 costs per unit are as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expensee Sales commissions Variable administrative expense Average Cost Per Unit $5.60 $3.10 $1.40 $4.00 $2.60 $2.20 $1.20 $0.45 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? (Round your "per unit" answer to 2 decimal places and other answers to the nearest whole dollar amount.) Total manufacturing overhead cost Manufacturing overhead per unit

Answer 1

12
Variable manufacturing overhead	17500	=12500*1.4
Fixed manufacturing overhead	40000	=10000*4
Total manufacturing overhead cost	57500
Manufacturing overhead per unit	4.60	=57500/12500
13
Selling price	21.60
Less: Unit variable cost	11.75	=5.6+3.1+1.4+1.2+0.45
Contribution margin per unit	9.85
14
Direct materials	56000	=10000*5.6
Direct labor	31000	=10000*3.1
Total direct manufacturing cost	87000
Variable manufacturing overhead	14000	=10000*1.4
Fixed manufacturing overhead	40000	=10000*4
Total indirect manufacturing cost	54000
15
Direct materials	5.60
Direct labor	3.10
Variable manufacturing overhead	1.40
Incremental cost per unit produced	10.10