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Mikes Inc. has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.85 Direct labor $ 3.60 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 10,400 Sales commissions $ 1.50 Variable administrative expense $ 0.50 Fixed selling and administrative expense $ 3,200

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TomShelby

Answer:

Marginal cost: $13.70

Missing question:

Additional cost from increasing their output by one unit.

Explanation:

The company will inccur only the variable cost as the fixed cost are within the relevant range:

Direct materials $ 6.85

Direct labor $ 3.60

Variable manufacturing overhead $ 1.25

Sales commissions $ 1.50

Variable administrative expense $ 0.50

Total variable cost: $13.70

producing an additional unit will genrate marginal cost for $13.70

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