Question

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: Average Cost Per Unit Direct materials $ 6.80 Direct labor $ 4.30 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.80 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 If 8,000 units are produced and sold, what is the variable cost per unit produced and sold?

Answer 1

Answer:

Total cost= $114,800

Explanation:

Giving the following information:

Direct materials $ 6.80

Direct labor $ 4.30

Variable manufacturing overhead $1.60

Sales commissions $ 1.20

Variable administrative expense $ 0.45

Unitary variable cost= $14.35

Total cost for 8,000 units:

Total cost= 14.35*8,000= $114,800