Kubin Company\'s relevant range of production is 15,000 to 19,000 units, When it
ID: 2329375 • Letter: K
Question
Kubin Company's relevant range of production is 15,000 to 19,000 units, When it produces and sells 17.000 units, its average costs per unit are as follows: Average Cost per Unit $7.60 $4.60 $2.10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expe Sales commissions Variable administrative s 5.60 $4.10 $3.10 $1.60 $1.10 expense Required: 1. Assume the cost object is units of production: a What is the total direct manufacturing cost incurred to make 17,000 units? b. What is the total indirect manufacturing cost incurred to make 17.000 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 17,000 units a. How much total manufacturing cost is directly traceable to the Manufacturing Department? b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department? 3. Assume the cost object is the company's vaious sales representatives. Furthermore, assume that the company spent $52,700 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 17.,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives? b. When the company sells 17/,000 units, what is the total indirect selling expense that cannot be readly traced to indvidual sales representatives?Explanation / Answer
1a. Computation of Total Direct Manufacturing Cost
Total direct manufacturing cost = Units Produced * ( Direct Material + Direct Labor)
Total direct manufacturing cost = 17000 * ( $7.60 + $4.60)
Total direct manufacturing cost = $207400
1b. Computation of Total InDirect Manufacturing Cost
Total Indirect manufacturing cost = Units Produced * ( Variable MOH + Fixed MOH)
Total Indirect manufacturing cost = 17000 * ( $2.10 + $5.60)
Total Indirect manufacturing cost = $130900
2a. Computation of Total Traceable Manufacturing Cost
Total Traceable Manufacturing Cost = Units Produced * ( Direct Material + Direct Labor + Variable MOH + Fixed MOH)
Total Traceable manufacturing cost = 17000 * ( $7.60 + $4.60 + $2.10 + $5.60)
Total Traceable manufacturing cost = $338300
2b. Computation of Total Indirect Traceable Manufacturing Cost
As all costs are Traceable Manufacturing Cost, The Indirect cost cannot be traceable to manufacturing is Zero
3a. Computation of Direct Selling Expense
Direct Selling Expense = Commission * Units Sold + Fixed Selling Commission
Direct Selling Expense = $1.60 * 17000 + (17000 * $4.10 - $52700)
Direct Selling Expense = $44200
3b.Computation of indirect selling expenses
Indirect selling expenses = Advertising Expenses = $52700
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