When Addams Corporation produces and sells 4,200 units, its average costs per unit are shown in the table below. The company's relevant range of activity is 3,000 to 7,000 units. Average Cost per Unit Direct materials Direct labor $6.60 $3.40 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.50 Fixed selling expense $0.65 Fixed administrative expense $0.50 Sales commissions $0.40 Variable administrative expense $0.40 Required: a. If 5,200 units are sold, what is the variable cost per unit sold? b. If 5,200 units are sold, what is the total amount of variable costs related to the units sold? c. If 5,200 units are produced, what is the average fixed manufacturing cost per unit produced? d. If 5,200 units are produced, what is the total amount of fixed manufacturing cost incurred?
When Addams Corporation produces and sells 4,200 units, its average costs per unit are shown in the table below. The company's relevant range of activity is 3,000 to 7,000 units. Average Cost per Unit Direct materials Direct labor $6.60 $3.40 Variable manufacturing overhead $1.40 Fixed manufacturing overhead $4.50 Fixed selling expense $0.65 Fixed administrative expense $0.50 Sales commissions $0.40 Variable administrative expense $0.40 Required: a. If 5,200 units are sold, what is the variable cost per unit sold? b. If 5,200 units are sold, what is the total amount of variable costs related to the units sold? c. If 5,200 units are produced, what is the average fixed manufacturing cost per unit produced? d. If 5,200 units are produced, what is the total amount of fixed manufacturing cost incurred?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:When Addams Corporation produces and sells 4,200 units, its average costs per unit are shown in the table below. The company's
relevant range of activity is 3,000 to 7,000 units.
Average Cost per Unit
Direct materials
Direct labor
$6.60
$3.40
Variable manufacturing overhead $1.40
Fixed manufacturing overhead
$4.50
Fixed selling expense
$0.65
Fixed administrative expense
$0.50
Sales commissions
$0.40
Variable administrative expense $0.40
Required:
a. If 5,200 units are sold, what is the variable cost per unit sold?
b. If 5,200 units are sold, what is the total amount of variable costs related to the units sold?
c. If 5,200 units are produced, what is the average fixed manufacturing cost per unit produced?
d. If 5,200 units are produced, what is the total amount of fixed manufacturing cost incurred?
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