CH 1 Foundational 15

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? (Do not round intermediate calculations.)

$151,000 Direct materials 6.10 (10000) + Direct labor 3.40 (10,000) + Variable manufacturing overhead 1.40 (10,000) + Fixed manufacturing overhead 4.00 (10,000) = 151,000

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 For financial accounting purposes, what is the total amount of period costs incurred to sell 10,000 units?

$68,500 Fixed selling expense 3.10 (10,000) + Fixed administrative expense 2.10 (10,000) + Sale commisions 1.10 (10,000) + Variable administrative expense 0.55 (10,000) = $68,500

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 If 12,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production? Total direct manufacturing cost________ Total indirect manufacturing cost_____

1) 116,400 DM+DL x number units produced Direct materials $6.10 + Direct labor $3.60 x 12,000 = 116,400 2) 64,800 fixed manu over x number units + variable over x units produced 4.00 (10,000) + 1.40 (12,000) = 56,800

If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis? Total manufacturing overhead cost____ Manufacturing overhead per unit___

1) 51200 avg fixed manu over x number units used to calc + var overhead per units x number units produced 4.00 x 10,000 + 1.40 x 8,000 = 51200 2) 6.40 51200/8000

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis? 1. Total manufacturing overhead cost____ 2. Manufacturing overhead per unit___

1) 57500 avg fixed manu over x number units used to calc + var overhead per units x number units produced 4.00 x 10,000 + 1.40 x 125,00 = 57500 2) 4.60 total manu over cost / manu overhead per unit 57500 / 12500 = 4.60

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 If 8,000 units are produced and sold, what is the variable cost per unit produced and sold?

12.75 Direct materials $6.10 + Direct labor $3.60 + Variable manufacturing overhead $1.40 + Sales commissions $1.10 + Variable administrative expense $0.55 = 12.75

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 If 8,000 units are produced and sold, what is the total amount of variable costs related to the units produced and sold?

102,000 Direct materials $6.10 + Direct labor $3.60 + Variable manufacturing overhead $1.40 + Sales commissions $1.10 + Variable administrative expense $0.55 = 12.75 multiply by 8,000 = $102,000

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units?

11.10 DM+DL+var manu overhead per unit

If 12,500 units are produced and sold, what is the variable cost per unit produced and sold?

12.75 Direct materials $6.10 + Direct labor $3.60 + Variable manufacturing overhead $1.40 + Sales commissions $1.10 + Variable administrative expense $0.55 = 12.75

If 12,500 units are produced and sold, what is the total amount of variable costs related to the units produced and sold?

159,375 Direct materials $6.10 + Direct labor $3.60 + Variable manufacturing overhead $1.40 + Sales commissions $1.10 + Variable administrative expense $0.55 = 12.75 multiply by 12,500 = $159,375

If 12,500 units are produced, what is the average fixed manufacturing cost per unit produced?

3.20 avg fixed manu over per unit x number untis calc / number produced 4.00 x 10,000 = 40,000 / # of produced $40,000 / 12,500 = $3.20

If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

40,000 avg fixed manu over per unit x number units used to calc 4.00 x 10,000

If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

40,000 avg fixed manu over per unit x total fixed manu cost 4.00 x 10,000

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 If 8,000 units are produced, what is the average fixed manufacturing cost per unit produced?

5.00 Given that 10,000 units were budgeted, thus the total fixed manufacturing overhead is given by 10,000 x $4.00 = $40,000 Therefore, if 8,000 units are produced, the average fixed manufacturing cost per unit produced is given by $40,000 / 8,000 = $5.00

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: Direct materials $6.10 Direct labor $3.60 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.00 Fixed selling expense $3.10 Fixed administrative expense $2.10 Sales commissions $1.10 Variable administrative expense $0.55 If the selling price is $22.10 per unit, what is the contribution margin per unit?

9.35 Selling price -DM+DL+VMO+Sales com+var admin expense Direct materials $6.10 + Direct labor $3.60 + Variable manufacturing overhead $1.40 + Sales commissions $1.10 + Variable administrative expense $0.55 = 12.75 >>> 22.10 - 12.75 = 9.35