This question is incomplete, the complete question is;
Martinez company's relevant range 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 $7.00
Direct labor $4.50
Variable manufacturing overhead $1.40
Fixed manufacturing overhead $4.00
Fixed selling expense $4.00
Fixed administrative expense $2.10
Sales commissions $1.10
Variable administrative expense $0.55
If 8,000 units are produced,
a) what is the total amount of manufacturing overhead cost incurred to support this level of production
b) What is this total amount expressed on a per unit basis
Answer:
a) the total amount of manufacturing overhead cost incurred to support this level of production is $51,200
b) What is this total amount expressed on a per unit basis is $6.40
Explanation:
a)
Given that;
number of units produced is 8,000 units
Variable manufacturing overhead is $1.40
Variable manufacturing overhead cost will be units produced / Variable manufacturing overhead
so Variable manufacturing overhead cost = 8000 units × $1.40 = $11,200
Now Fixed manufacturing overhead cost = 10000 units × $4 = $ 40,000
Total manufacturing overhead cost is the addition of Variable manufacturing overhead cost and Fixed manufacturing overhead cost
$11,200 + $40,000 = $51,200
b)
Number of units produced = 8,000
therefore Manufacturing overhead per unit = Total manufacturing overhead cost / Number of units produced
51,200 / 8,000 = $6.40
