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 unit costs are as follows: [L01, Amount Per Unit Direct materials Direct labor.. Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense...... Sales commissions Variable administrative expense $6.00 $3.50 $1.50 $4.00 $3.00 $2.00 $1.00 $0.50 Required: 1. If 8,000 units are sold, what is the variable cost per unit sold? 2. If 12.500 units are sold, what is the variable cost per unit sold? 3. If 8.000 units are sold, what is the total amount of variable costs related to the units sold? 4. If 12,500 units are sold, what is the total amount of variable costs related to the units sold? 5. If 8,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 12,500 units are produced, what is the average fixed manufacturing cost per unit produced? 7. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production? 8. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production? 9. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? 10. Refer to 9 above, what is this total amount expressed on a per unit basis? 11. If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? 12. Refer to 11 above, 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 sold? 11 11,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production? 13. What total incremental cost will Martinez incur if it increases production from 10,000 to 10,001 units?

pls answer ?

Answer 1

1. If 8000 units are sold total variable cost per unit sold is $12.5 per unit.

solution:

	Amount
Direct material	$6
Direct labor	$3.5
Variable manufacturing overhead	$1.5
Sales commission	$1
Variable administrative expense	$0.5
Total variable cost per unit	$12.5

2.

If 12500 units are sold total variable cost per unit sold is $12.5 per unit.

solution:

	Amount
Direct material	$6
Direct labor	$3.5
Variable manufacturing overhead	$1.5
Sales commission	$1
Variable administrative expense	$0.5
Total variable cost per unit	$12.5

3. If 8000 units are sold total amount of variable cost is $100000.

Solution.

Total amount of variable cost = variable cost per unit sold * 8000 units

= $12.5*8000

= $100000

4. If 12500 units are sold total amount of variable cost is $156250

Solution:

Total amount of variable cost = variable cost per unit sold * 12500 units

= $12.5*12500

= $156250.

5. Average fixed manufacturing cost per unit produced is $5 per unit.

Solution:

Average fixed manufacturing cost per unit produced = Total fixed manufacturing cost / total units produced

= $40000/8000 units

= $5 per unit.

6. Average fixed manufacturing cost per unit produced is $3.2 per unit.

Solution:

Average fixed manufacturing cost per unit produced = Total fixed manufacturing cost / total units produced

= $40000/12500 units

= $3.2 per unit.

7. Total amount of fixed manufacturing cost at 8000 units = $40000.

Solution:

Total amount of fixed manufacturing cost = Average fixed manufacturing cost per unit * total units produced

= $5 * 8000 units

= $40000.

Total amount of fixed overhead do not change with the changes in level of production.

8. Total amount of fixed manufacturing cost at 12500 units = $40000.

Solution:

Total amount of fixed manufacturing cost = Average fixed manufacturing cost per unit * total units produced

= $3.2 * 12500 units

= $40000.

Note: Calculations of Total fixed overhead-

	Calculations	Amount
Fixed manufacturing overhead	$4*10000 units	$40000
Fixed selling overhead	$3*10000 units	$30000
Fixed administrative expenses	$2*10000 units	$20000