Question

Required information Skip to question [The following information applies to the questions displayed below.] 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 $ 5.90 Direct labor $ 3.40 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 2.90 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? (Do not round intermediate calculations.)

Answer 1

The total amount of product costs incurred to make 10,000 unit is $150,000.

What is product costs?

Product cost means the total costs incurred to create a product including  direct labor, direct materials, consumable production supplies, factory overhead etc

What is total amount of product costs incurred to make 10,000 units?

Product cost = Direct materials + direct labor + manufacturing overhead

Product cost = $6 + $3.50 + $1.50 + $4.00

Product cost = $15 per unit

For the 10,000 units = 10,000 units * 15

For the 10,000 units = $150,000.

In conclusion, the total amount of product costs incurred to make 10,000 unit is $150,000.

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