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, 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 $5.80 $3.30 $1.50 $4.00 $2.80 $2.00 $1.00 $0.50 equired For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? (Do not round ntermediate calculations.) Total product cost

Explanation / Answer

For financial accounting purpose while calculating product cost only manufacturing cost will be taken , selling cost will not be included , based on this concept per unit product cost will be as follows:

Total amount of product cost incurred to make 10,000 units=10,000*14.60=$1,46,000

Particulars Average cost per unit in $ Direct Material 5.80 Direct Labour 3.30 Variable Manufacturing Overhead 1.50 Fixed Manufacturing Overhead 4.00 Total per unit product cost incurred to make 14.60

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