Kubin Company’s relevant range of production is 28,000 to 31,500 units. When it
ID: 2328337 • Letter: K
Question
Kubin Company’s relevant range of production is 28,000 to 31,500 units. When it produces and sells 29,750 units, its average costs per unit are as follows:
Required:
3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $127,925 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.
a. When the company sells 29,750 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 29,750 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
Average Cost per Unit Direct materials $ 8.80 Direct labor $ 5.80 Variable manufacturing overhead $ 3.30 Fixed manufacturing overhead $ 6.80 Fixed selling expense $ 5.30 Fixed administrative expense $ 4.30 Sales commissions $ 2.80 Variable administrative expense $ 2.30Explanation / Answer
Total Selling expense for 29750 units: Fixed Selling expenses (29750*5.30) 157675 Add: Sales commission (29750*2.80) 83300 Total Selling expense for 29750 units: 240975 Less: Untraceable Selling expense 127925 (Advertisement expense) Traceable Selling expense to Sales representative 113050 Req a: Total selling expense traceable t sales representative: $ 113050 Req b: Total Selling expense untraceable to Sales representative $ 127925
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