ACC 222
What is the contribution margin per unit sold? (start at $22 per unit, direct materials direct materials $6, direct labor $3.5, variable manufacturing overhead $1.5, sales commission $1, variable administrative expense $0.50)
Add up all the variable dollar amounts to get $22 subtracted by $12.5 for a final answer of $9.5
What total incremental cost will Martinez incur if it increases production from 10,000 to 10,001 units?
It would be only those manufacturing costs that are variable, which are: Direct materials $ 6.00 Direct labor $ 3.50 Variable manufacturing overhead $ 1.50 = $11 incremental total manufacturing costs All other costs are either fixed or sales and administrative costs.
What is the average fixed manufacturing cost? (8,000 units sold but we start with 10,000, fixed manufacturing overhead is $4)
Take the amount of units you start with and multiply by the cost of fixed manufacturing overhead (10,000*$4) then divide by units sold ($40,000/8,000= $5 per unit)
What is the total amount of manufacturing overhead cost? (start with 10,000 units, 8,000 units sold, fixed manufacturing overhead $4, variable manufacturing overhead $1.5)
Take 10,000*4=$40,000 then add 8,000*$1.5=$12,000 to get $52,000. Divide $52,000 by 8,000 to get $6.5 per unit
If 11,000 units are produced, what are the total amounts of direct manufacturing costs incurred to support this level of production?
Take direct materials ($6) added to direct labor ($3.5) to get $9.5 multiplied by 11,000 to get $104,500
How to solve variable cost per unit sold? (8,000 units, direct materials $6, direct labor $3.5, variable manufacturing overhead $1.5, sales commission $1, variable administrative expense $0.50)
Take each variable cost and multiply by 8,000, then take the total and divide it by 8,000 to get cost per unit.
If 11,000 units are produced, what are the total amounts of indirect manufacturing costs incurred to support this level of production?
use the fixed manufacturing overhead, $4.00, and the variable manufacturing overhead, $1.50, to find the answer. $4.00(10,000 units)= $40,000 $40,000 + ($1.50 * 11,000)= $56,500
