Martinez company\'s relevant range of production is 7,700 units to 12,700 units

Question

Martinez company's relevant range of production is 7,700 units to 12,700 units when it produces and sells 10,200 units its unit costs are as follows: Direct Materials 6.30 Direct Labor 3.80 Variable Manufacture Overhead 1.50 Fixed Manufacture Overhead 4.30 Fixed Selling Expense 3.30 Fixed Administration Expense 2.00 Sales Commissions 1.00 Variable Administration expenses 0.50. If 12,700 units are produced what is the total amount of manufacturing overhead costs expressed on a per unit basis? Round 2 decimal places

Explanation / Answer

Fixed manufacturing overhead = $4.30 x 10,200 = $43,860

Variable manufacturing overhead (for 12,700 units) = $1.5 x 12,700 = $19,050

Total manufacturing overhead cost for 12,700 units = $(43,860 + 19,050) = $62,910

Unit manufacturing overhead cost = $62,910 / 12,700 = $4.95 per unit

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.