Question

[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	$	5.10
Direct labor	$	2.60
Variable manufacturing overhead	$	1.60
Fixed manufacturing overhead	$	4.00
Fixed selling expense	$	2.10
Fixed administrative expense	$	2.10
Sales commissions	$	1.10
Variable administrative expense	$	0.55

7. If 8,000 units are produced, what is the average fixed manufacturing cost per unit produced?

13. If the selling price is $21.10 per unit, what is the contribution margin per unit?

14. If 12,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production?

Answer 1

10000 4.00 Requirement: 7 At Units Fixed manufacturing overhead Total Fixed manufacturing over head (C)= If Units produced Average fixed manufacturing cost per unit (A) (B) (A)*(B) (D) (C)/(D) 40000 8000 5.00

Requirement: 13 Selling price Less: Variable cost Contribution margin per unit 21.10 10.95 10.15 5.10 2.60 Requirement: 14 a Direct material Direct labor Total Direct manufacturing cost per unit If Units produced Total amount of Direct manufacturing cost (A) (B) (A) * (B) 7.70 12000 92400 1.60 4.00 Requirement: 14b Variable manufacturing overhead Fixed manufacturing overhead Total In Direct manufacturing cost per unit If Units produced Total amount of In Direct manufacturing cost 5.601 (A) (B) (A)*(B) 12000 67200