Question

Martinez Company's relevant range of production is 7,500 units. when it produces and sells 10,000 unites. its average cost per unit are as follows : direct materials $ 6 direct labor$3.5 variable manufacturing overhead $1.5 fixed manufacturing overhead $4 fixed selling expense $3 fixed administrative expense $2 sales commissions $1 variable administrative expense $0.5

for financial accounting purposes, what is the total amount of product costs incurred to sell 10,000 units? do not round intermediate calculations.

Answer 1

Ans. 1		Cost per unit	Units	Total
	Direct materials	$6.00	10000	$60,000
	Direct labor	$3.50	10000	$35,000
	Variable manufacturing overhead	$1.50	10000	$15,000
	Fixed manufacturing overhead	$4.00	10000	$40,000
	Total product cost			$150,000
	*Total product cost includes the manufacturing cost whether it is fixed or variable.