Question

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: Average Cost Per Unit Direct materials $6.10 $3.60 $1.40 $4.00 $3.10 $2.10 $1.10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense $0.55 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? (Do not round intermediate calculations.) Total product cost 10

Answer 1

Calculation of total product cost to make 10,000 units

	Per unit cost	Total for 10,000 units
Direct material	6.10	61000
Direct labor	3.6	36000
Variable manufacturing overhead	1.4	14000
Fixed manufacturing overhead	4	40000
Total product cost	15.1	151,000