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:

  

	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	$	1.80

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?

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

b. What is the total indirect manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

	1a. Direct materials per unit $8.30 Direct labor per unit Direct manufacturing cost per unit $8.30 Number of units sold Total direct manufacturing cost $0 1b. Variable manufacturing overhead per unit Fixed manufacturing overhead per unit Indirect manufacturing cost per unit $0.00 Number of units sold Total indirect manufacturing cost $0

• Required 1
• Required 2
• Required 3

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? (Round per unit values to 2 decimal places.)

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

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	2a. Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit Total manufacturing cost per unit $0.00 Number of units sold Total direct costs $0 2b. Total indirect costs

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? (Round per unit value to 2 decimal places.)

b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

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	3a. Sales commissions per unit Number of units sold Total sales commission $0 Fixed portion of sales representatives’ compensation Total direct selling expense $0 3b. The total indirect selling expense

Answer 1

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Part 1a
Direct Material		$            8.30
Direct Labor		$            5.30
Direct Manufacturing cost per unit		$          13.60
No of unit sold		25,250
Total Direct manufacturing cost		$     343,400
Part 1b
Variable Manufacturing overhead		$            2.80
Fixed manufacturing overhead		$            6.30
Direct Manufacturing cost per unit		$            9.10
No of unit sold		25,250
Total Direct manufacturing cost		$     229,775
Part 2a
Direct Material		$            8.30
Direct Labor		$            5.30
Variable Manufacturing overhead		$            2.80
Fixed manufacturing overhead		$            6.30
Direct Manufacturing cost per unit		$          22.70
No of unit sold		25,250
Total Direct manufacturing cost		$     573,175
Part 1b
None of cost will be considered indirect when cost object is Manufacturing department
Part 3a
Fixed Selling expense per unit		$            4.80
No of unit sold		25,250
Total Fixed selling expense		$     121,200
Less: Advertising Expenditure		$      -95,950
Fixed portion of sales representative compensation	A	$        25,250
Sales Commission		$            2.30
No of unit sold		25,250
Total Sales commission		$        58,075
add: Fixed portion of sales representative compensaiton	A-above	$        25,250
Total Direct Selling expense		$ 83,325.00
Part 3b
Direct selling expense that can not be traced directly		$ 95,950.00
(Advertising Expenditure)