Foundational 15 Chapter 1 Essay

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Chapter 1 The Foundational 15 Martinez Company’s relevant range of Production is 7,500 to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows: | AmountPer Unit | Direct Materials | $ 6.00 | Direct Labor | 3.50 | Variable Manufacturing Overhead | 1.50 | Fixed Manufacturing Overhead | 4.00 | Fixed Selling Expenses | 3.00 | Fixed Administrative Expense | 2.00 | Sales Commissions | 1.00 | Variable Administration Expense | 0.50 | Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? Direct Materials $6.00 Direct Labor $3.50 Variable Manuf OH $1.50 Fixed Manuf OH $4.00…show more content…
8000 x $4.00 = $32,000 10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production? 12500 x $4.00 = $50,000 11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is the total amount expressed on a per unit basis? Variable Manuf. OH $1.50 Fixed Manuf. OH $4.00 $5.50 8000 x $5.50 = $44,000 12. If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is the total amount expressed on a per unit basis? Variable Manuf. OH $1.50 Fixed Manuf. OH $4.00 $5.50 12500 x $5.50 = $68,750 13. If the selling price is $22 per unit, what is the contribution margin per unit sold? Selling Price $22.00 * Direct Materials $6.00 * Direct Labor $3.50 * Var. Manuf. OH $1.50 * Sales Commission $1.00 * Var Admin Exp $0.50 $12.50 Contribution Margin $9.50 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? Direct Materials $6.00 Direct Labor $3.50 Variable Manuf. OH $1.50 Fixed Manuf. OH $4.00 $15.00 15. What total incremental cost will
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