Question

Martinez Company’s relevant range of production is 8,900 units to 13,900 units. When it produces and sells 11,400 units, its unit costs are as follows:

	Amount Per Unit
Direct materials	$	6.70
Direct labor	$	4.20
Variable manufacturing overhead	$	1.40
Fixed manufacturing overhead	$	4.70
Fixed selling expense	$	3.70
Fixed administrative expense	$	2.10
Sales commissions	$	1.10
Variable administrative expense	$	0.55

11-a.

If 9,400 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?

11-b.

If 9,400 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis? (Round your answer to 2 decimal places.)

12-a.

If 13,900 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?

12-b.

If 13,900 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis? (Round your answer to 2 decimal places.

13.	If the selling price is $22.70 per unit, what is the contribution margin per unit sold? (Round your answer to 2 decimal places.)

14-a.

If 12,400 units are produced, what are the total amount of direct manufacturing costs incurred to support this level of production

14-b.

If 12,400 units are produced, what are the total amount of indirect manufacturing costs incurred to support this level of production

15.	What total incremental cost will Martinez incur if it increases production from 11,400 to 11,401 units? (Round your answer to 2 decimal places.)

  

Answer 1

Solution:

11a) –

Manufacturing Overhead Cost is the sum of variable manufacturing overhead cost and fixed manufacturing overhead cost.

Fixed Manufacturing Costs are the cost which remain fixed or constant within a relevant range of production level. It will not change irrespective of change in production volume.

Hence, in the given question, the fixed cost is 11,400 Units x $4.70 = $53,580

Total Manufacturing Overhead Cost at 9,400 Units of Production = Variable Manufacturing Overhead Cost ($1.40*9,400) + Fixed Manufacturing Overhead Cost $53,580

= $13,160 + 53,580

= $66,740

11b)

total amount of manufacturing overhead cost expressed on a per unit basis = Total Manufacturing Overhead Cost $66,740 / Units Produced 9,400 Units

= $7.10 per unit

12a)

Total amount of manufacturing overhead cost incurred to support 13,900 level of production = Variable Manufacturing Overhead Cost ($1.40*13,900) + Fixed Manufacturing Overhead Cost $53,580

= $19,460 + 53,580

= $73,040

12b)

total amount of manufacturing overhead cost expressed on a per unit basis at 13,900 Production level = Total Manufacturing Overhead Cost $73,040 / Units Produced 13,900 Units

= $5.25 per unit

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Pls ask separate question for remaining parts