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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 materials $ 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

Required:

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

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M948806

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