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Skolnick Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 5.00 Direct labor $ 4.50 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 112,000 Sales commissions $ 1.20 Variable administrative expense $ 0.50 Fixed selling and administrative expense $ 35,200 Required: a. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred? (Do not round intermediate calculations.) b. If 8,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

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Answer:

Results are below.

Explanation:

Giving the following information:

Direct materials $5.00

Direct labor $4.50

Variable manufacturing overhead $1.60

Fixed manufacturing overhead $112,000

First, we need to calculate the direct production costs if 8,000 units are produced:

Direct costs= direct material + direct labor

Direct costs= (5+4.5)*8,000= $76,000

Now, the indirect costs of production for 8,000 units.

Indirect costs= total variable costs  total fixed costs

Indirect costs= 1.6*8,000 + 112,000

Indirect costs= $124,800

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