Martinez Company’s relevant range of production is 8,500 units to 13,500 units.

Question

Martinez Company’s relevant range of production is 8,500 units to 13,500 units. When it produces and sells 11,000 units, its unit costs are as follows:

5. If 9,000 units are sold, what is the total amount of variable costs related to the units sold?

6. If 13,000 units are sold, what is the total amount of variable costs related to the units sold?

Martinez Company’s relevant range of production is 8,500 units to 13,500 units. When it produces and sells 11,000 units, its unit costs are as follows:

Explanation / Answer

5.

For 9000 units sold the variable cost is 9,000 * 12.25 per unit = $110,250.

6.

For 13000 units sold the variable cost is 13,000 * 12.25 per unit = $159,250.

7.

For 9000 units the fixed manufacturing cost per unit is:

(11,000 * 4.4 per unit )/9,000 units = 5.37 per unit.

8.

For 13000 units the fixed manufacturing cost per unit is:

(11,000 * 4.4 per unit )/13,000 units = 3.72 per unit.

Compute the variable cost per unit Particulars Amount($) Direct Materials 6.4 Direct Labour 3.9 Variable Manu O/H 1.4 Variable Admin Exp 0.55 Total Variable costs 12.25

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

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