The costs per unit and period for Milligan Exploration for allrelevant ranges of activity is as follows:
Cost perUnit Cost per Period
Selling price perunit 14.25
Directmaterials 5.00
Directlabor 2.90
Variable manufacturingoverhead 1.25
Fixed manufacturingoverhead - $21,000
Salescommissions 1.00
Variable administrativeexpense 0.55
Fixed selling and administrativeexp. $7,500
1. If Milligan produces 4,200 units, what is the total amount ofdirect manufacturing cost incurred?
2. If 5,000 units are produced by Milligan, what is the totalamount of indirect manufacturing overhead cost incurred?
3. What is Milligan’s contribution margin per unit sold?
