1. How do you calculate: If 11,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production?
2.What total incremental cost will Martinez incur if it increases production from 10,000 to 10,001 units?
Show work please for calculations
Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows:
Amount Per Unit
Direct Material - $6.00
Direct Labor - $3.50
Variable manufacturing overhead - $1.50
Fixed manufacturing overhead - $4.00
Fixed selling expense - $3.00
Fixed administrative expense - $2.00
Sales commissions - $1.00
Variable administrative expense - $0.50