Question

Kubin Company's relevant range of production is 26,000 to 35,500 units. When it produces and sells 30,750 units, its average costs per unit are as follows: 

	expense Average Cost per Unit
Direct materials	$ 8.60
Direct labor	$ 5.60
Variable manufacturing overhead	$ 3.10
Fixed manufacturing overhead	$ 6.60
Fixed selling expense	$ 5.10
Fixed administrative expense	$ 4.10
Sales commissions	$ 2.60
Variable administrative	$ 2.60

Required:

 1. For financial accounting purposes, what is the total amount of product costs incurred to make 30,750 units?

 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 30.750 units?

 3. For financial accounting purposes, what is the total amount of product costs incurred to make 35,500 units?

 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 26,000 units?

 (For all requirements, do not round intermediate calculations.)

1. Total amount of product costs 

2. Total amount of period costs incurred 

3. Total amount of product costs 

4. Total amount of period costs

Answer 1

# 1 is incorrect.

Answer is:

direct materials 8.6

direct labor 5.6

fixed manufacturing overhead 6.6

variable manufacturing overhead 3.1

cost per units 23.9 x 30,750 = 734,925

# 2 is correct - 427,425

#3 is incorrect

answer is:

direct materials 8.6

direct labo 5.6

fixed manufacturing overhead (6.6*30750/35500 = 5.7169)

variable manufacturing overhead 3.1

total per unit 23.0169

x 35,500 units = 817,100

#4 is incorrect

answer is:

fixed selling expense (5.1*30750/26000 = 6.03173)

fixed admin expense (4.1/30750/26000 = 4.84904)

fixed selling & admin = 10.8808 x 26,000 = 282,900

sales commission 2.6

variable admin expense 2.1

total variable selling and admin or unit: 4.7 x 26000 = 122,200

282,900 + 122,200 = 405,100