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: Average Cost per Unit $6.00 $3.50 $ 1.50 $4.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense $3.00 $2.00 $1.00 $0.50 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10.000 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 10.000 units? 3. If 8.000 units are produced and sold, what is the variable cost per unit produced and sold? 4. If 12,500 units are produced and sold, what is the variable cost per unit produced and sold? 5. If 8,000 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? 6. If 12,500 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? 7. If 8.000 units are produced, what is the average fixed manufacturing cost per unit produced? S. If 12.500 units are produced, what is the average fixed manufacturing cost per unit produced? 9. If 8.000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production? 10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production? 11. If 8,000 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? 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? 13. If the selling price is $22 per unit, what is the contribution margin per unit? Page 50 14. If 11.000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production? 15. What incremental manufacturing cost will Martinez incur if it increases production from 10.000 to 10.001 units?

Answer 1

1)
Direct materials ($6 * 10,000 units)	$60,000
Direct labor ($3.50 * 10,000 units)	$35,000
Varible manufacturing overheads ($1.50 * 10,000 units)	$15,000
Total product cost	$110,000
2)
Fixed manufacturing overhead ($4 * 10,000 units)	$40,000
Fixed selling expense ($3 * 10,0000 units)	$30,000
Fixed administrative expense ($2 * 10,000 units)	$20,000
Total period cost	$90,000
3)
Direct materials	$6
Direct labor	$3.50
Variable manufacturing overhead	$1.50
Variable administrative expense	$0.50
Variable cost per unit	$12
4)
Direct materials	$6
Direct labor	$3.50
Variable manufacturing overhead	$1.50
Variable administrative expense	$0.50
Variable cost per unit	$12
Variable cost per unit is always fixed irrespective of the units produced.
5)
Variable cost ($12 * 8,000 units)	$92,000
Notes: As per HOMEWORKLIB RULES, the first four sub parts should be answered but I have answered the first five sub parts, hence, please post the remaining sub parts separately. Please do not give negative rating for not answering all sub parts because I have just followed the HOMEWORKLIB RULES.