Arman Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows:??Average Cost per Unit?Direct materials$6.10?Direct labor$2.90?Variable manufacturing overhead$1.25?Fixed manufacturing overhead$3.00?Fixed selling expense$1.05?Fixed administrative expense$0.60?Sales commissions$1.50?Variable administrative expense$0.55Required:a. If 6,000 units are produced, what is the total amount of fixed manufacturing cost incurred?b. If 6,000 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis?c. If 4,000 units are produced, what is the total amount of direct manufacturing cost incurred?d. If 4,000
units are produced, what is the total amount of indirect manufacturing cost incurred?
What will be an ideal response?
a.
| ? | Fixed manufacturing overhead per unit | $3.00 |
| ? | Number of units produced | 5,000 |
| ? | Total fixed manufacturing overhead cost | $15,000 |
b.
| ? | Total variable manufacturing overhead cost ($1.25 per unit x 6,000 units) | $7,500 |
| ? | Total fixed manufacturing overhead cost ($3.00 per unit x 5,000 units*) | 15,000 |
| ? | Total manufacturing overhead cost (a) | $22,500 |
| ? | Number of units produced (b) | 6,000 |
| ? | Manufacturing overhead per unit (a) ÷ (b) | $3.75 |
c.
| ? | Direct materials | $6.10 |
| ? | Direct labor | 2.90 |
| ? | Direct manufacturing cost per unit (a) | $9.00 |
| ? | Number of units produced (b) | 4,000 |
| ? | Total direct manufacturing cost (a) × (b) | $36,000 |
d.
| ? | Total variable manufacturing overhead cost ($1.25 per unit x 4,000 units) | $5,000 |
| ? | Total fixed manufacturing overhead cost ($3.00 per unit x 5,000 units*) | 15,000 |
| ? | Total indirect manufacturing cost | $20,000 |
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