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When Addams Corporation produces and sells 5,200 units, its average costs per unit are shown in the table below. The company

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Answer #1

a) Total variable cost per unit for 5200 units = direct materials + Direct labor + V. Mfg OHD + Sales Commissions + V. Admn Expense

= $5.10 + $3.45 + $1.40 + $0.35 + $0.35 = $10.65

Total Variable cost per unit of $10.65 is for 5200 units, therefore total variable cost per unit for 6200 units = $10.65 * 6200 units/5200units = $12.70

b) Total amount of variable costs for 6200 units sold = $12.70 * 6200 units = $78,740 /-

c) Avg fixed manufacturing cost per unit = Fixed Mfg OHD = $3.50 per units (Since, it is a fixed cost)

d) Total fixed manufacturing cost incurred = 6200 units * $3.50 = $21,700/-

e) Incremental mfg cost incurred = variable mfg cost + fixed mfg cost

= (direct materials + direct labor + Variable  mfg OHD) + Fixed Mfg OHD

= ($5.10 + $3.45 + $1.40) + $3.50 = $13.45/-

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