Question
1. if 9,000 units are sold, what is the variable cost per unit sold?
2. if 9,000 units are sold what is the total amount of variable costs related to the units sold?
Martinez Companys relevant range of production is 8.500 units to 13,500 units. When it produces and sells 11,000 units, its
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Answer #1

Solution :

(1) Variable Cost per Unit = Direct Material + Direct Labor +Variable Manufacturing OH + Sales Commission + Varaible Administrative Expenses

= $ 6.10 + $ 3.60 + $ 1.40 + $ 1.10 + $ 0.55

= $ 12.75

(2) Total Variable Cost = Variable Cost per Unit * Total Unit Sold

= $ 12.75 * 9,000

= $ 114,750.   

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