Question

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: Average Cost per Unit Direct materials $ 6.10 Direct labor $ 3.60 Variable manufacturing overhead $ 1.40 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.10 Fixed administrative expense $ 2.10 Sales commissions $ 1.10 Variable administrative expense $ 0.55 4. If 12,500 units are produced and sold, what is the variable cost per unit produced and sold? (Round your answer to 2 decimal places.)

Answer 1

The variable cost per unit produced and sold is $12.75.

Explanation:

variable cost per unit produced and sold = Direct materials + Direct labor + Variable manufacturing overhead + Fixed selling expense + Sales commissions + Variable administrative expense

= $ 6.10 + $ 3.60 + $ 1.40 + 1.10 + $ 0.55

= $12.75

Therefore, The variable cost per unit produced and sold is $12.75.