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?

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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 (11.8015500)**	$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 2 weeks ago

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