Question
In: Accounting
Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells...
Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells 15,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.40 Direct labor $ 4.40 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 5.40 Fixed selling expense $ 3.90 Fixed administrative expense $ 2.90 Sales commissions $ 1.40 Variable administrative expense $ 0.90 Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 15,500 units? b. What is the total indirect manufacturing cost incurred to make 15,500 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 15,500 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 $44,950 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 15,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives? b. When the company sells 15,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
Solutions
Expert Solution
| Answer: 1 a | |
| Direct Material | $7.40 |
| Direct Labor | $4.40 |
| Direct Manufacturing cost | $11.80 |
| No. of Units | 15500 |
| Total direct manufacturing cost (11.80*15500) | $182,900 |
| Answer: 1 b | |
| Variable manufacturing overhead | $1.90 |
| Fixed manufacturing overhead | 5.40 |
| Indirect Manufacturing cost | $7.30 |
| No. of Units | 15500 |
| Total indirect manufacturing cost | $113,150 |
| Answer: 2a | |
| Direct Material | $7.40 |
| Direct Labor | $4.40 |
| Variable manufacturing overhead | 1.90 |
| Fixed manufacturing overhead | 5.40 |
| Total manufacturing traceable cost | $19.10 |
| No. of Units | 15500 |
| Total manufacturing traceable cost | $296050 |
Answer: 2b
No indirect cost, as the cost object is the manufacturing department.
| Answer: 3a | |
| Fixed selling expense per unit | 3.90 |
| Number of units sold | 15500 |
| Total fixed selling expenses (3.90*15500) | 60450 |
| Advertising expenses | $44950 |
| A.Fixed portion of sales representatives' compensation (60450 - 44950) | 15500 |
| Sales commission per unit | 1.40 |
| Number of units sold | 15500 |
| B. Total sales commission (1.40*15500) | 21700 |
| Total Direct selling expense = A+B | 37200 |
| Answer: 3b | |
| Indirect Selling expense( advertising expense) | 44950 |
ekkarill92 answered 6 months agoRelated Solutions
Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells...
Kubin Company’s relevant range of production is 13,000 to 18,000
units. When it produces and sells 15,500 units, its average costs
per unit are as follows: Amount per Unit Direct materials $ 7.40
Direct labor $ 4.40 Variable manufacturing overhead $ 1.90 Fixed
manufacturing overhead $ 5.40 Fixed selling expense $ 3.90 Fixed
administrative expense $ 2.90 Sales commissions $ 1.40 Variable
administrative expense $ 0.90 Required: 1. If 13,000 units are
produced and sold, what is the variable cost...
Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells...
Kubin Company’s relevant range of production is 18,000 to 22,000
units. When it produces and sells 20,000 units, its average costs
per unit are as follows:
Average Cost per Unit
Direct materials
$
7.00
Direct labor
$
4.00
Variable manufacturing overhead
$
1.50
Fixed manufacturing overhead
$
5.00
Fixed selling expense
$
3.50
Fixed administrative expense
$
2.50
Sales commissions
$
1.00
Variable administrative expense
$
0.50
Required:
1. Assume the cost object is units of production:
a. What...
Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells...
Kubin Company’s relevant range of production is 18,000 to 22,000
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Direct materials
$
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Direct labor
$
4.00
Variable manufacturing
overhead
$
1.50
Fixed manufacturing
overhead
$
5.00
Fixed selling expense
$
3.50
Fixed administrative
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$
2.50
Sales commissions
$
1.00
Variable administrative
expense
$
0.50
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Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells...
Kubin Company’s relevant range of production is 18,000 to 22,000
units. When it produces and sells 20,000 units, its average costs
per unit are as follows:
Average Cost per Unit
Direct materials
$
7.00
Direct labor
$
4.00
Variable manufacturing
overhead
$
1.50
Fixed manufacturing
overhead
$
5.00
Fixed selling expense
$
3.50
Fixed administrative
expense
$
2.50
Sales commissions
$
1.00
Variable administrative
expense
$
0.50
Required:
1. Assume the cost object is units of production:
a. What...
Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells...
Kubin Company’s relevant range of production is 18,000 to 22,000
units. When it produces and sells 20,000 units, its average costs
per unit are as follows:
Amount per Unit
Direct
materials
$
7.00
Direct
labor
$
4.00
Variable
manufacturing overhead
$
1.50
Fixed
manufacturing overhead
$
5.00
Fixed selling
expense
$
3.50
Fixed
administrative expense
$
2.50
Sales
commissions
$
1.00
Variable
administrative expense
$
0.50
Required:
1. If 18,000 units are produced and sold, what is the variable
cost...
Kubin Company’s relevant range of production is 26,000 to 35,500 units. When it produces and sells...
Kubin Company’s relevant range of production is 26,000 to 35,500
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per unit are as follows:
Average Cost per Unit
Direct materials
$
8.60
Direct labor
$
5.60
Variable manufacturing overhead
$
3.10
Fixed manufacturing overhead
$
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Fixed selling expense
$
5.10
Fixed administrative expense
$
4.10
Sales commissions
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2.60
Variable administrative expense
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2.10
Required:
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Kubin Company’s relevant range of production is 25,000 to 33,500
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Average Cost per Unit
Direct materials
$
8.50
Direct labor
$
5.50
Variable manufacturing overhead
$
3.00
Fixed manufacturing overhead
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Fixed selling expense
$
5.00
Fixed administrative expense
$
4.00
Sales commissions
$
2.50
Variable administrative expense
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2.00
Required:
1. Assume the cost object is units of production:
a. What...
Kubin Company’s relevant range of production is 28,000 to 31,500 units. When it produces and sells...
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:
Amount 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
Required:
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Kubin Company’s relevant range of production is 16,000 to 24,500 units. When it produces and sells...
Kubin Company’s relevant range of production is 16,000 to 24,500
units. When it produces and sells 20,250 units, its average costs
per unit are as follows: Amount per Unit Direct materials $ 7.70
Direct labor $ 4.70 Variable manufacturing overhead $ 2.20 Fixed
manufacturing overhead $ 5.70 Fixed selling expense $ 4.20 Fixed
administrative expense $ 3.20 Sales commissions $ 1.70 Variable
administrative expense $ 1.20 Required: 1. If 16,000 units are
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Kubin Company’s relevant range of production is 14,000 to 20,500 units. When it produces and sells...
Kubin Company’s relevant range of production is 14,000 to 20,500
units. When it produces and sells 17,250 units, its average costs
per unit are as follows:
Direct materials
$
7.50
Direct labor
$
4.50
Variable manufacturing
overhead
$
2.00
Fixed manufacturing
overhead
$
5.50
Fixed selling expense
$
4.00
Fixed administrative
expense
$
3.00
Sales commissions
$
1.50
Variable administrative
expense
$
1.00
Required:
1. What is the incremental manufacturing cost incurred if the
company increases production from 17,250 to...
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