Company XYZ is currently producing and selling 100 units. At this level, the total direct materials cost is $500, the total direct labor cost is $1,400 and the total manufacturing overhead cost is $1,240, which includes $800 fixed manufacturing overhead cost. The company's total selling and administrative expenses are $2,700, which include $1,500 fixed selling and administrative costs. Assume that the company wishes to increase the number of units produced and sold to 102 units, what would be the incremental cost? (rounded to nearest ($) value) O a. 63 О Ь. 47 O C. None of the given answers O d. 71 e. 35

Company XYZ is currently producing and selling 100 units. At this level, the total direct materials cost is $500, the total direct labor cost is $1,400 and the total manufacturing overhead cost is $1,240, which includes $800 fixed manufacturing overhead cost. The company's total selling and administrative expenses are $2,700, which include $1,500 fixed selling and administrative costs. Assume that the company wishes to increase the number of units produced and sold to 102 units, what would be the incremental cost? (rounded to nearest ($) value) O a. 63 О Ь. 47 O C. None of the given answers O d. 71 e. 35

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.50 Direct labor $ 3.00 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 2.50 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 10,000 units? (Do not round intermediate calculations.)
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