Question

Check my work 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 $6.10 $3.60 $1.40 $4.00 $3.10 $2.10 $1.10 $0.55 5. If 8,000 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.) Total variable cost

Answer 1

If 8000 units produced and sold the amount of variable cost related to units produced and sold is :

	Rate per unit ($)	Amount
Direct material	6.10	48800
Direct labour	3.60	28800
Variable manufacturing overhead	1.40	11200
Fixed manufacturing overhead	not a variable cost
Fixed selling expense	not a variable cost
Fixed administrative expense	not a variable cost
Sales commission	1.10	8800
Variable administrative overheads	0.55	4400
Total variable cost		102000

If 12500 units produced and sold the amount of variable cost related to units produced and sold is :

	Rate per unit ($)	Amount
Direct material	6.10	76250
Direct labour	3.60	45000
Variable manufacturing overhead	1.40	17500
Fixed manufacturing overhead	not a variable cost
Fixed selling expense	not a variable cost
Fixed administrative expense	not a variable cost
Sales commission	1.10	13750
Variable administrative expense	0.55	6875
Total variable cost		159375

If 8000 units produced average fixed manufacturing cost per unit is :

Direct material	48800
Direct labour	28800
Variable manufacturing overhead	11200
Fixed manufacturing overhead	40000
Total manufacturing cost	128800
Number of units	8000
Manufacturing cost per unit	16.10

If 12500 units produced average fixed manufacturing cost per unit is :

Direct material	76250
Direct labour	45000
Variable manufacturing overhead	17500
Fixed manufacturing overhead	40000
Total manufacturing cost	178750
Number of units	12500
Manufacturing cost per unit	14.3