Karpowicz Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows:??Average Cost per Unit?Direct materials$6.25?Direct labor$4.15?Variable manufacturing overhead$1.60?Fixed manufacturing overhead$12.60?Fixed selling expense$3.15?Fixed administrative expense$1.80?Sales commissions$1.50?Variable administrative expense$0.45Required:a. If the selling price is $21.40 per unit, what is the contribution margin per unit sold?b. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred?c. If 8,000 units are produced, what is the total amount of indirect manufacturing cost incurred?d. What incremental manufacturing cost will the company incur if it
increases production from 9,000 to 9,001 units?
What will be an ideal response?
a.
| ? | Selling price per unit | ? | $21.40 |
| ? | Direct materials | $6.25 | ? |
| ? | Direct labor | 4.15 | ? |
| ? | Variable manufacturing overhead | 1.60 | ? |
| ? | Sales commissions | 1.50 | ? |
| ? | Variable administrative expense | 0.45 | ? |
| ? | Variable cost per unit sold | ? | 13.95 |
| ? | Contribution margin per unit | ? | $7.45 |
b.
| ? | Direct materials | $6.25 |
| ? | Direct labor | 4.15 |
| ? | Direct manufacturing cost per unit (a) | $10.40 |
| ? | Number of units produced (b) | 8,000 |
| ? | Total direct manufacturing cost (a) × (b) | $83,200 |
c.
| ? | Total variable manufacturing overhead cost ($1.60 per unit x 8,000 units) | $12,800 |
| ? | Total fixed manufacturing overhead cost ($12.60 per unit x 9,000 units*) | 113,400 |
| ? | Total indirect manufacturing cost | $126,200 |
d.
| ? | Direct materials | $6.25 |
| ? | Direct labor | 4.15 |
| ? | Variable manufacturing overhead | 1.60 |
| ? | Incremental manufacturing cost | $12.00 |
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