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 average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales comissions Variable administrative expense Average Cost per Unit $6.00 $3.50 $1.50 $4.00 $3.00 $2.00 $1.00 $8.50 Foundational 1-14 14. If 11,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production? (Do not round intermediate calculations.)

Answer 1

14)
Particulars	Cost per Unit (in $ )
Direct materials	$ 6
Direct labor	$ 3.50
Total Cost per unit	$ 9.50
x Units produced	11,000 units
Total Direct manufacturing cost	$ 104,500
Particulars	Cost per Unit (in $ )
Variable Manufacturing overhead	$ 1.45
x Units produced	11,000 units
Total Variable manufacturing overhead cost	$16,500
Add: Fixed manufacturing overhead               ( 4 x 10,000 Units )	$ 40,000
Total indirect manufacturing costs	$ 56,500
12)
Particulars	Cost per Unit (in $ )
Variable Manufacturing overhead per unit	$ 1.50
Add: Fixed manufacturing overhead per unit              ( $ 40,000 / 12,500 units )	$ 3.20
Manufacturing Cost per Unit	$ 4.70