Please solve and explain: The following information applies to the questions dis

Question

Please solve and explain:

The following information applies to the questions displayed below.) 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 Direct materials Direct labor Varlable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commisslons Varlable administrative expense Amount Per Unit $ 5.10 $2.60 $1.60 $ 3.10 $ 210 2.10 $1.10 $0.55

Explanation / Answer

12a.

Fixed manufacturing overhead will not vary when number of units produced changed. so we are taking fixed manufacturing overhead same as when it is produced 11,000 units.

12b.

13. Contribution margin will calculate by deducting all variable expenses from selling price

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Variable manufacturing overhead ($1.60*13,000) $ 20,800 Fixed manufacturing overhead ($3.10*11,000) $ 34,100 Total manufacturing overhead cost $ 54,900

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