Required information The following information applies to the questions displaye

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, ts 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 $5.80 $3.30 $1.50 $4.00 $2.80 $2.00 $1.00 $0.50 15. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units? (Round your answer to 2 decimal places.)

Explanation / Answer

Variable Manufacturing Cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead
Variable Manufacturing Cost = $5.80 + $3.30 + $1.50
Variable Manufacturing Cost = $10.60

Incremental Manufacturing Cost = Variable Manufacturing Cost * Number of unit production increased
Incremental Manufacturing Cost = $10.60 * 1
Incremental Manufacturing Cost = $10.60

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