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: If 12,500 units are produced and sold. What is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.) Total variable cost
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Question & Answer: 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 cost…..
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Variable Cost if 12500 Units Produced | ||
Cost | Per unit | Cost for 12500 |
Direct Material | $5.60 | 70000 |
Direct Labour | $3.10 | 38750 |
Variable Manufacturing Overhead | $1.40 | 17500 |
Variable Administrative Expenses | $0.45 | 5625 |
Sales Commission | $1.20 | 15000 |
Total Variable Cost | 146875 |
Note:- Sales Commission has bee assumed to be as Variable Cost.