Please answer and explain: I asked this question previously and was gaven me the
ID: 2341041 • Letter: P
Question
Please answer and explain:
I asked this question previously and was gaven me the wrong answer.
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 $0.55Explanation / Answer
Answer
Variable Costs:
Direct Material [Direct manufacturing cost]
5.1
Direct Labor [Direct manufacturing cost]
2.6
Variable manufacturing overhead [Indirect manufacturing cost]
1.6
Total Variable manufacturing cost
9.3
Sales commission [non manufacturing cost]
1.1
Variable administrative expenses commission [non manufacturing cost]
0.55
Total variable selling & administrative cost
1.65
Total variable cost per unit
10.95
Fixed manufacturing cost [indirect manufacturing cost]
[11,000 units x $ 3.10]
$ 34,100.00
Fixed selling expenses commission [non manufacturing cost]
[11,000 units x $ 2.1]
$ 23,100.00
Fixed administrative expense commission [non manufacturing cost]
[11,000 units x $ 2.1]
$ 23,100.00
A
Direct Material
$ 5.10
B
Direct Labor
$ 2.60
C =A+B
Total Direct cost per unit
$ 7.70
D
Units produced
12000
E = C x D
Total Direct Manufacturing cost
$ 92,400.00 = Answer
A
Variable manufacturing overhead
$ 1.60
B
Units produced
12,000
C =A x B
Indirect manufacturing variable cost
$ 19,200.00
D
Fixed manufacturing cost [calculated in working]
$ 34,100.00
E = C+D
Total Indirect manufacturing cost
$ 53,300.00 = Answer
When Units produced is increased, only Variable cost per unit is increased. Fixed cost remains the same.
Variable cost per unit calculated above in Working is $ 10.95 per unit
Hence, Incremental cost per unit produced = $ 10.95
Variable Costs:
Direct Material [Direct manufacturing cost]
5.1
Direct Labor [Direct manufacturing cost]
2.6
Variable manufacturing overhead [Indirect manufacturing cost]
1.6
Total Variable manufacturing cost
9.3
Sales commission [non manufacturing cost]
1.1
Variable administrative expenses commission [non manufacturing cost]
0.55
Total variable selling & administrative cost
1.65
Total variable cost per unit
10.95