Question

Saxbury Corporation's relevant range of activity is 3,000 units to 7000 units. When it produces and sells 5,700 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $5.60 $ 3.70 $1.90 $3.80 $.85 $.70 s.60 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense $ 0.60 Required: a. For financlal reporting purposes, what is the total amount of product costs incurred to make 5,700 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 5,700 units? c. If 6,700 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.) d. If 6,700 units are sold, what is the total amount of variable costs related to the units sold? e. If 6,700 units are produced, what is the average fixed manufacturing cost per unit produced? (Round "Per unit" answer to 2 decimal places.) f. If 6,700 units are produced, what is the total amount of fixed manufacturing cost incurred? q. If 6,700 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 $23.10 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.) i. If 4,700 units are produced, what is the total amount of direct manufacturing cost incurred? J If 4,700 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 5,700 to 5,701 units? (Round "Per unit" answer to 2 decimal places.)

Answer 1

1) Solution: $85,500

Working:

Direct materials	5.6
Direct labor	3.7
Variable manufacturing overhead	1.9
Variable manufacturing cost per unit	11.2
Total variable manufacturing cost	63840
(5700 units * 11.2)
Total fixed manufacturing overhead cost	21660
(5700 units * 3.8)
Total product (manufacturing) cost	85500

　

2) Solution: $18,425

Working:

Sales commissions	0.6
Variable administrative expense	0.6
Variable selling and administrative expense per unit	1.2
Total variable selling and administrative expense	8040
(6700 units * 1.2)
Total fixed selling and administrative expense	10385
[6700 units * (0.85 + 0.70)]
Total period (nonmanufacturing) cost	18425

　

3) Solution: $12.40

Working:

Direct materials	5.6
Direct labor	3.7
Variable manufacturing overhead	1.9
Sales commissions	0.6
Variable administrative expense	0.6
Variable cost per unit sold	12.4

　

4) Solution: $83,080

Working:

Variable cost per unit sold	12.4
Number of units sold	6700
Total variable costs (6700 units * $12.4)	83080

As per policy, we have to answer the first four parts