Calculate the contribution margin per unit

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Reference no: EM131031743

Martinez Company’s relevant range of production is 9,000 units to 15,000 units. In the most recent period Martinez produced and sold 13,000 units, its revenues and costs were as follows:

Sales Rev 22.00 per unit 286,000 total

Fixed Admin Exp 2.20 per unit 28.600 total

DM 5.50 per unit 71,500 total

DL 4.20 per unit 54,600 total

Sales commission 1.00 per unit 13,000 total

Variable Admin Exp 0.50 per unit 6,500 total

Variable MOH 2.50 per unit 32,500 total

Fixed MOH 2.00 per unit 26,000 total

Fixed Selling Exp 1.50 per unit 19,500 total

If during the coming period Martinez produces 10,000 units and sells 9,000 units calculate the following:

Required: Calculate the following:

(a) The contribution margin per unit.

(b) The total manufacturing cost.

(c) The total cost of ending inventory on an absorption cost balance sheet.

(d) The total cost of ending inventory on a variable cost balance sheet.

(e) The operating income using absorption costing.

(f) The operating income using variable costing.

Reference no: EM131031743

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