Question

Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 4,800 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 $ 6.00 $ 3.90 $ 1.60 $ 4.50 $ 0.70 $ 0.55 $ 0.45 $ 0.45 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 4,800 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 4,800 units? c. If 5,800 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.) d. If 5,800 units are sold, what is the total amount of variable costs related to the units sold? e. If 5,800 units are produced, what is the average fixed manufacturing cost per unit produced? (Round "Per unit" answer to 2 decimal places.) f. If 5,800 units are produced, what is the total amount of fixed manufacturing cost incurred? g. If 5,800 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis? (Round "Per unit" answer to 2 decimal places.) h. If the selling price is $23.50 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.) 1. If 3,800 units are produced, what is the total amount of direct manufacturing cost incurred? j. If 3,800 units are produced, what is the total amount of indirect manufacturing cost incurred? k. What incremental manufacturing cost will the company incur if it increases production from 4,800 to 4,801 units? (Round "Per unit" answer to 2 decimal places.) Total nutrnet

Answer 1

a) Total product cost = 16*4800 = 76800

b) Total period cost = 2.15*4800 = 10320

c) Variable cost per unit sold = 6+3.9+1.6+0.45+.45 = 12.40

d) Total variable cost = 5800*12.40 = 71920

e) Average fixed manufacturing overhead cost per unit = (4800*4.5)/5800 = 3.72

f) Total fixed manufacturing overhead cost = 4800*4.5 = 21600

g) Total manufacturing overhead cost = (1.6*5800+21600) = 30880

Manufacturing overhead per unit = 30880/5800 = 5.32

h) Contribution margin per unit = 23.50-12.40 = 11.10

i) Total direct manufacturing cost = 9.9*3800 = 37620

j) Total indirect manufacturing cost = (3800*1.6+21600) = 27680

k) Incremental manufacturing cost = 9.9+1.6 = 11.50