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Kubin Company’s relevant range of production is 27,000 to 29,000 units. When it produces and sells...

Kubin Company’s relevant range of production is 27,000 to 29,000 units. When it produces and sells 28,000 units, its average costs per unit are as follows: Amount per Unit Direct materials $ 8.70 Direct labor $ 5.70 Variable manufacturing overhead $ 3.20 Fixed manufacturing overhead $ 6.70 Fixed selling expense $ 5.20 Fixed administrative expense $ 4.20 Sales commissions $ 2.70 Variable administrative expense $ 2.20 5. If 27,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 29,000 units are produced, what is the average fixed manufacturing cost per unit produced? 7. If 27,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? 8. If 29,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

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Expert Solution

Answer 5.
Production = 27,000 Units
Fixed Manufacturing Cost - $6.70 X 28,000 Units
Fixed Manufacturing Cost - $187,600
Average Fixed Manufacturing Cost per Unit = $187,600 / 27,000 Units
Average Fixed Manufacturing Cost per Unit = $6.95 per Unit (approx.)
Answer 6.
Production = 29,000 Units
Fixed Manufacturing Cost - $6.70 X 28,000 Units
Fixed Manufacturing Cost - $187,600
Average Fixed Manufacturing Cost per Unit = $187,600 / 29,000 Units
Average Fixed Manufacturing Cost per Unit = $6.47 per Unit (approx.)
Answer 7.
Production = 27,000 Units
Fixed Manufacturing Cost - $6.70 X 28,000 Units
Fixed Manufacturing Cost - $187,600
Answer 8.
Production = 29,000 Units
Fixed Manufacturing Cost - $6.70 X 28,000 Units
Fixed Manufacturing Cost - $187,600

ekkarill92 answered 2 years ago
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