Martinez Company’s relevant range of production is 7,500 units to 12,500 units.

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 average costs per unit are as follows:

9. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

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 this total amount expressed on a per unit basis? (Round your "per unit" answer to 2 decimal places and other answers to the nearest whole dollar amount.)

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 this total amount expressed on a per unit basis? (Round your "per unit" answer to 2 decimal places and other answers to the nearest whole dollar amount.)

13. If the selling price is $22.70 per unit, what is the contribution margin per unit? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

14. If 12,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production? (Do not round intermediate calculations.)

15. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units? (Round your answer to 2 decimal places.)

Average Cost per Unit Direct materials $ 6.70 Direct labor $ 4.20 Variable manufacturing overhead $ 1.40 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.70 Fixed administrative expense $ 2.10 Sales commissions $ 1.10 Variable administrative expense $ 0.55

Explanation / Answer

9) Fixed Manufacturing Overhead Per unit 4 no. of units used to calculate fixed manufacturing 10000 cost 40000 10) Fixed Manufacturing Overhead Per unit 4 no. of units used to calculate fixed manufacturing 10000 cost 40000 11) Fixed manufacturig overhead per unit 4 No. of units used calculate fixed cost per unit 10000 Total fixed manufacturing overhead 40000 Variable overhead per unit 1.4 no. of units 8000 Total Variable overhead 11200 Fixed manufacturing overhead 40000 Total manufacturing overhead cost 51200 Manufacturing overhead per unit 51200/8000 6.4 12) Fixed manufacturig overhead per unit 4 No. of units used calculate fixed cost per unit 10000 Total fixed manufacturing overhead 40000 Variable overhead per unit 1.4 no. of units 12500 Total Variable overhead 17500 Fixed manufacturing overhead 40000 Total manufacturing overhead cost 57500 Manufacturing overhead per unit 57500/12500 4.6

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