Kubin Company’s relevant range of production is 15,000 to 19,000 units. When it

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:

Direct naterials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Amount per Unit $ 7.60 $ 4.60 $ 2.10 $5.60 $ 4.10 $ 3.10 $1.60 $ 1.10 Required 1. If 15,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 19,000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 15,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 4. If 19,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 5. If 15,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 19,000 units are produced, what is the average fixed manufacturing cost per unit produced? 7. If 15,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? 8. If 19,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? (Round per unit values to 2 decimal places. 1. Variable cost per unit 2. Variable cost per unit 3. Total amount of variable cost 4. Total amount of variable cost 5. Average fixed manufacturing cost per unit 6. Average fixed manufacturing cost per unit 7. Total amount of fixed manufacturing overhead 8. Total amount of fixed manufacturing overhead

Explanation / Answer

Calculate following :

1. Variable cost per unit 17 per unit 2. Variable cost per unit 17 per unit 3. Total amount of variable cost (15000*17) 255000 4. Total amount of variable cost (19000*17) 323000 5. Average fixed manufacturing cost per unit (17000*5.60/15000) 6.35 per unit 6. Average fixed manufacturing cost per unit (17000*5.60/19000) 5.01 per unit 7. Total amount of fixed manufacturing overhead 95200 8. Total amount of fixed manufacturing overhead 95200

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