Required information [The following information applies to the questions displayed below.] 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: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $ 7.00 $ 4.50 $ 1.40 $ 4.00 $ 4.00 $ 2.10 $ 1.10 $ 0.55 15. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units? (Round your answer to 2 decimal places.) Incremental cost per unit produced
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Required information
[The following information applies to the questions displayed below.]
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:
#
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Fixed selling expense
Fixed administrative expense
Sales commissions
Variable administrative expense
Incremental cost per unit produced
15. What incremental manufacturing cost will Martinez incur if it increases production
from 10,000 to 10,001 units? (Round your answer to 2 decimal places.)
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Average Cost
per Unit
$ 7.00
$ 4.50
$ 1.40
7
$4.00
$ 4.00
$ 2.10
$ 1.10
$ 0.55
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Variable costs are those nature of costs which changes with change in activity level or volume. Whenever production increases or decreases, only variable costs will change. Fixed costs do not change with increase or decrease in production.
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