Kubin Company’s relevant range of production is 23,000 to 27,500 units. When it
ID: 2406520 • Letter: K
Question
Kubin Company’s relevant range of production is 23,000 to 27,500 units. When it produces and sells 25,250 units, its average costs per unit are as follows:
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 25,250 units?
b. What is the total indirect manufacturing cost incurred to make 25,250 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 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 various sales representatives. Furthermore, assume that the company spent $95,950 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 25,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
ufacturing cost incurred to make 23,000 units?
3a
Average Cost per Unit Direct materials $ 8.30 Direct labor $ 5.30 Variable manufacturing overhead $ 2.80 Fixed manufacturing overhead $ 6.30 Fixed selling expense $ 4.80 Fixed administrative expense $ 3.80 Sales commissions $ 2.30 Variable administrative expense $ 1.80Explanation / Answer
1a) Direct Materials per unit 8.3 DL per unit 5.3 DMC per unit 13.6 Number of units sold 25250 Total direct manufacturing cost 343400 1b) VMO per unit 2.8 FMO per unit 6.3 Indirect Manufacturing Cost per unit 9.1 Number of units sold 25250 Total indirect manufacturing cost 229775 2a) Direct material per unit 8.3 DL per unit 5.3 VMO per unit 2.8 FMO per unit 6.3 Total Manufacturing Cost per unit 22.7 Number of units sold 25250 Total direct cost 573175 2b) Total Indirect costs 229775 3a) Sales commissions per unit 2.3 Number of units sold 25250 Total Sales Commission 58075 Fixed portion of Sales repre compensation 95950 Total direct selling expense 154025 3b) Total Indirect selling expense 95950
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