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 unit costs are as follows:

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 10,000 units?

3. If 8,000 units are sold, what is the variable cost per unit sold? (Round your answer to 2 decimal places.)

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

6. If 12,500 units are produced, what is this total amount of manufacturing overhead cost expressed on a per unit basis? (Round your answer to 2 decimal places.)

7. What total incremental cost will Martinez incur if it increases production from 10,000 to 10,001 units?

Please i do not want the answer show please how did you get the answer. Thank you

[The following information applies to the questions displayed below.]

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:

Explanation / Answer

1)product cost = Direct materials + direct labor + manufacturing overhead

                          =$6 +$3.50 +$1.50 +4.00 = $15 per unit

for 10,000 units = 10,000*15 = $150,000

2)period expense = fixed selling expense$3 +fixed administrative expense2.00 +sales commission 1.00 +Variable administrative .50

= 10,000 * 6.50 = $65,000

3)variable cost per unit = Direct materials $6 + direct labor $3.50 + Variable overhead 1.50 +Sales commission $1.00+ Variable adm expense .50

total variable cost per uni = $12.50

5)Manufacturing overhead = variable overhead + fixed overhead

=12,500*1.50 + (10,000 *4) = $58,750

7) incremental cost = variable cost per unit * units

hence $12.50 *1 = $12.50

1)product cost = Direct materials + direct labor + manufacturing overhead

                          =$6 +$3.50 +$1.50 +4.00 = $15 per unit

for 10,000 units = 10,000*15 = $150,000

2)period expense = fixed selling expense$3 +fixed administrative expense2.00 +sales commission 1.00 +Variable administrative .50

= 10,000 * 6.50 = $65,000

3)variable cost per unit = Direct materials $6 + direct labor $3.50 + Variable overhead 1.50 +Sales commission $1.00+ Variable adm expense .50

total variable cost per uni = $12.50

4)total variable cost = 8000*12.50 = $100,000

5)Manufacturing overhead = variable overhead + fixed overhead

=12,500*1.50 + (10,000 *4) = $58,750

6)per unit = $58,750/12,500 = $4.70

7) incremental cost = variable cost per unit * units

hence $12.50 *1 = $12.50

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