Question
In: Accounting
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:
1. If 28,000 units are produced and sold, what is the variable cost per unit produced and sold?
2. If 31,500 units are produced and sold, what is the variable cost per unit produced and sold?
3. If 28,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?
4. If 31,500 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?
5. If 28,000 units are produced, what is the average fixed manufacturing cost per unit produced?
6. If 31,500 units are produced, what is the average fixed manufacturing cost per unit produced?
7. If 28,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?
8. If 31,500 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?
Solutions
Expert Solution
| 28,000 Units | 31,500 Units | |||
| 1 & 2 | Variable cost per unit | $ 23 per unit | $ 23 per unit | |
| 3 & 4 | Total amount of variable cost |
$ 644,000 ( 28,000 x $ 23) |
$ 724,500 ( 31,500 x $ 23) |
|
| 5 & 6 | Average fixed manufacturing cost per unit |
$ 7.23 ( $ 202,300 / 28,000) |
$ 6.42 ( $ 202,300 / 31,500) |
|
| 7 & 8 | Total Amount of fixed manufacturing overhead |
$ 202,300 ($ 29,750 x $ 6.80 ) |
$ 202,300 ($ 29,750 x $ 6.80 ) |
|
| Particulars | Per unit | |||
| Direct Materials | $ 8.80 | |||
| Direct Labor | $ 5.80 | |||
| Variable Manufacturing Overhead | $ 3.30 | |||
| Sales Commission | $ 2.80 | |||
| Variable Administrative expenses | $ 2.30 | |||
| Total Variable Cost per Unit | $ 23 per unit | |||
| Particulars | Per unit at 29,750 Units | Total Fixed Cost | ||
| Fixed manufacturing overhead | $ 6.80 | $ 202,300 | ||
| Fixed selling expenses | $ 5.30 | $ 157,675 | ||
| Fixed administrative expenses | $ 4.30 | $ 127,925 | ||
| Total Fixed Cost | $ 487,900 |
ekkarill92 answered 2 years agoRelated Solutions
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:
1. What is the incremental manufacturing cost incurred if the
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Average Cost per Unit
Direct materials
$
8.60
Direct labor
$
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Variable manufacturing overhead
$
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Fixed manufacturing overhead
$
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Fixed selling expense
$
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Fixed administrative expense
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Sales commissions
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Variable administrative expense
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Direct labor
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Fixed manufacturing overhead
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Fixed selling expense
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Direct materials
$
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Direct labor
$
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Variable manufacturing overhead
$
1.50
Fixed manufacturing overhead
$
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Fixed selling expense
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Fixed administrative expense
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Sales commissions
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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
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Direct materials
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Direct labor
$
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$
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Fixed selling expense
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Fixed administrative
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Direct materials $7.10
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Fixed manufacturing overhead$5.10
Fixed selling expense$3.60
Fixed administrative expense$2.60
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Direct labor
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Fixed selling expense
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Fixed administrative expense
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Variable administrative expense
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1.90
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Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells...
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units. When it produces and sells 27,500 units, its average costs
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Direct materials
$
8.40
Direct labor
$
5.40
Variable manufacturing
overhead
$
2.90
Fixed manufacturing
overhead
$
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Fixed selling expense
$
4.90
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expense
$
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Sales commissions
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expense
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1.90
3. Assume the cost object is the company’s various sales
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