Required information [The following information applies to the questions display

Question

Required information [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 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $5.70 $3.20 $1.60 $4.00 $2.70 $2.10 $1.10 $0.55 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.) Total product cost

Explanation / Answer

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8000 units *12.45=$99600

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12500*12.45=$155625

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(40000)/8000=$5 per unit

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40000/12500=$3.20 per unit

Direct Material 57000 Direct Labor 32000 Variable Manufacturing overhead 16000 Fixed Manufacturing overhead 40000 Total Product Cost 145000

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