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Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows:

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[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 average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$	6.50
Direct labor	$	4.00
Variable manufacturing overhead	$	1.60
Fixed manufacturing overhead	$	4.00
Fixed selling expense	$	3.50
Fixed administrative expense	$	2.20
Sales commissions	$	1.20
Variable administrative expense	$	0.45

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 10,000 units? (Do not round intermediate calculations.)

5. If 8,000 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.)

Answer 1

2). Period Cost => Fixed Selling Expenses per unit + Fixed administrative per unit + Variable Administrative per unit + Sales commissions.

=> $3.50 + 2.20 + 1.20 + 0.45 = $7.35.

Total Period Cost => Units Sold * $7.35 = 10,000 * $7.35 => $73,500.

5)Total amount of Variable Cost =>

Per Unit => Direct material + Direct Labor + Variable Manufacturing Overhead + Variable administrative expenses

=> $6.50 + $4.00 + $1.60 + 0.45 => $12.55.

Total Variable Cost => Units sold * rate => 8,000 * $12.55 = $100,400.

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