Martinez Companys relevant range of production is 8300 units

Martinez Company’s relevant range of production is 8,300 units to 13,300 units. When it produces and sells 10,800 units, its unit costs are as follows: Amount Per Unit Direct materials $ 5.80 Direct labor $ 3.30 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 3.80 Fixed selling expense $ 2.80 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 ________________________________________

9. If 8,800 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

10. If 13,300 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

11-a. If 8,800 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?

11-b. If 8,800 units are produced, what is the total amount of manufacturing overhead cost expressed on a per unit basis? (Round your answer to 2 decimal places.)

15. What total incremental cost will Martinez incur if it increases production from 10,800 to 10,801 units? (Round your answer to 2 decimal places.)

Solution

9) Total amount of fixed manufacturing overhead cost = 10800*3.8 = $41040

10) Total amount of fixed manufacturing cost = 10800*3.8 = $41040

11a) Total amount of manufacturing overhead cost = (8800*10.6+41040) = $134320

11b) Total amount of manufacturing overhead cost per unit = 134320/8800 = $15.26

15) Total incremental cost per unit = $10.60 per unit