Kubin Company’s relevant range of production is 28,000 to 31,500 units. When it

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:

1. Assume the cost object is units of production:

b. What is the total indirect manufacturing cost incurred to make 29,750 units?

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 $ 2.30

Explanation / Answer

solution: Total indirect manf. cost can be computed as follows:

Variable manufacturing overhead per unit $3.30

Fixed manufacturing overhead per unit      6.80

Indirect manufacturing cost per unit       $10.10

Number of units sold                                29,750

Total indirect manufacturing cost          $300, 475

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