Martinez comapny relevant range of production is 9,900 units to 14,900 units. Wh
ID: 2484243 • Letter: M
Question
Martinez comapny relevant range of production is 9,900 units to 14,900 units. When it produces and sells 12,400 units, its unit costs are as follows:
Direct materials: $6.80
Direct Labor $4.30
Variable manufacturing overhead: $1.60
Fixed Manufacturing overhead: $4.80
Fixed selling expense: $3.80
Fixed adminstrative expense: $2.20
Sales commissions $1.20
Variable administrative expensse: $0.45
1.If 10,400 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?
2.If 10,400 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis?
3. If 14,900 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?
4. If 14,900 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis?
5. if selling price is $22.80 per unit, what is the contribution margin per unit sold?
6. If 10,400 units are produced, what are teh total amount o fdirect manufacturing cost incurred to support this level of production?
7. If 10,400 units are produced, what are the total amount of indirect manufacturing cost incurred to support the level of produciton?
8. What total incremental cost will martinez incur if it increases prodction from 12,400 to 12,401 units?
Explanation / Answer
Solution:
1. If 10,400 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?
Variable Manufacturing overhead (10,400*1.6)
$16,640
Fixed Manufacturing overhead (12,400*$4.80)
$59,520
Total amount of manufacturing overhead cost
$76,160
Note – Fixed Cost will remain same between the range of 9,900 units to 14,900 Units. Fixed Cost in totality remains same.
2. If 10,400 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis?
Total amount of manufacturing overhead cost
$76,160
Produced Units
10,400 Units
Per Unit Total amount of Manufacturing Overhead
$7.323 per unit
3. If 14,900 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?
Variable Manufacturing overhead (14,900*1.6)
$23,840
Fixed Manufacturing overhead (12,400*$4.80)
$59,520
Total amount of manufacturing overhead cost
$83,360
Note – Fixed Cost will remain same between the range of 9,900 units to 14,900 Units. Fixed Cost in totality remains same.
4. If 14,900 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis?
Total amount of manufacturing overhead cost
$83,360
Produced Units
14,900 Units
Per Unit Total amount of Manufacturing Overhead
$5.595 per unit
Variable Manufacturing overhead (10,400*1.6)
$16,640
Fixed Manufacturing overhead (12,400*$4.80)
$59,520
Total amount of manufacturing overhead cost
$76,160
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