Reference no: EM133129966
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 unit costs are as follows:
Amount per Unit
Direct Materials $6.00, Direct Labor $3.50, Variable manufacturing overhead $1.50, Fixed Manufacturing overhead $4.00,
Fixed selling expense $3.00, Fixed administrative expense $2.00, Sales Commissions $1.00, and Variable administrative expense $0.50.
Required -
1. If 12,500 units are produced what is the total amount of manufacturing overhead cost incurred to support this level of production what is this total amount expressed on a per unit basis?
2. If the selling price is $22 per unit what is the contribution margin per unit?
3. If 11,000 units are produced what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production?
4. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units?
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