Question

Skolnick Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 5.30 Direct labor $ 3.50 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 150,000 Sales commissions $ 1.40 Variable administrative expense $ 0.45 Fixed selling and administrative expense $ 45,000 Required: a. If 10,000 units are produced, what is the total amount of direct manufacturing cost incurred? (Do not round intermediate calculations.) b. If 10,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

Answer 1

Answer:

(a) $88,000

(b) $166,000

Explanation:

(a) Total direct manufacturing cost per unit:

= Direct materials cost per unit + Direct labor cost per unit

= $ 5.30 + $ 3.50

= $8.80

Total direct manufacturing cost:

= Total direct manufacturing cost per unit × Number of units produced

= $8.80 × 10,000 units

= $88,000

(b) Total amount of indirect manufacturing costs:

= Fixed cost + Variable cost

= $150,000 + (Variable manufacturing overhead per unit × Number of units produced)

= $150,000 + ($1.60 × 10,000)

= $150,000 + $16,000

= $166,000