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Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces
and sells 4,500 units, its average costs per unit are as follows: Average Cost per Unit Direct
materials $ 6.30 Direct labor $ 3.20 Variable manufacturing overhead $ 1.90 Fixed
manufacturing overhead $ 3.90 Fixed selling expense $ 0.85 Fixed administrative expense $ 0.70
Sales commissions $ 0.60 Variable administrative expense $ 0.60 Required:
a. If 5,500 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2
decimal places.)
b. If 5,500 units are sold, what is the total amount of variable costs related to the units sold?
c. If 5,500 units are produced, what is the average fixed manufacturing cost per unit produced?
(Round "Per unit" answer to 2 decimal places.)
d. If 5,500 units are produced, what is the total amount of fixed manufacturing cost incurred?
e. If 5,500 units are produced, what is the total amount of manufacturing overhead cost incurred?
What is this total amount expressed on a per unit basis? (Round "Per unit" answer to 2 decimal
places.)
f. What incremental manufacturing cost will the company incur if it increases production from
4,500 to 4,501 units? (Round "Per unit" answer to 2 decimal places.)
Solution

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Saxbury Corporations relevant range of activity is 3,000 units to .pdf

  • 1. Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 4,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.30 Direct labor $ 3.20 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 3.90 Fixed selling expense $ 0.85 Fixed administrative expense $ 0.70 Sales commissions $ 0.60 Variable administrative expense $ 0.60 Required: a. If 5,500 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.) b. If 5,500 units are sold, what is the total amount of variable costs related to the units sold? c. If 5,500 units are produced, what is the average fixed manufacturing cost per unit produced? (Round "Per unit" answer to 2 decimal places.) d. If 5,500 units are produced, what is the total amount of fixed manufacturing cost incurred? e. If 5,500 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis? (Round "Per unit" answer to 2 decimal places.) f. What incremental manufacturing cost will the company incur if it increases production from 4,500 to 4,501 units? (Round "Per unit" answer to 2 decimal places.) Solution