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
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? and: What total incremental cost will Martinez incur if it increases production from 10,000 to 10,001 units?