Question

Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows:

  

	Average Cost per Unit
Direct materials	$	7.00
Direct labor	$	4.00
Variable manufacturing overhead	$	1.50
Fixed manufacturing overhead	$	5.00
Fixed selling expense	$	3.50
Fixed administrative expense	$	2.50
Sales commissions	$	1.00
Variable administrative expense	$	0.50

Required:

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 20,000 units?

b. What is the total indirect manufacturing cost incurred to make 20,000 units?

2. Assume the cost object is the Manufacturing Department and that its total output is 20,000 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 $50,000 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 20,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives?

b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 20,000 units? (Round per unit values to 2 decimal places.)

b. What is the total indirect manufacturing cost incurred to make 20,000 units? (Round per unit values to 2 decimal places.)

1a. Direct materials per unit $7.00selected answer correct Direct labor per unit 4.00selected answer correct Direct manufacturing cost per unit $11.00 Number of units sold 20,000selected answer correct Total direct manufacturing cost $220,000 1b. Variable manufacturing overhead per unit $1.50selected answer correct Fixed manufacturing overhead per unit 5.00selected answer correct Indirect manufacturing cost per unit $6.50 Number of units sold 20,000selected answer correct Total indirect manufacturing cost $130,000

2. Assume the cost object is the Manufacturing Department and that its total output is 20,000 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?

Show less

	2a. Direct materials per unit $7.00selected answer correct Direct labor per unit 4.00selected answer correct Variable manufacturing overhead per unit 1.50selected answer correct Fixed manufacturing overhead per unit not attempted Total manufacturing cost per unit $12.50 Number of units sold 20,000selected answer correct Total direct costs $250,000 2b. Total indirect costs not attempted

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $50,000 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 20,000 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 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

<a tabindex="1" aria-label="3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $50,000 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="" 20,000="" units,="" what="" is="" total="" direct="" selling="" expense="" that="" can="" be="" readily="" traced="" to="" individual="" representatives?="" (round="" per="" unit="" value="" 2="" decimal="" places.)="" b.="" indirect="" cannot="" show="" less'="" class="show gaga" style="margin: 0px; padding: 0px; border: 0px; color: rgb(22, 72, 131); font-weight: bold; outline: none; font-size: 11px; position: absolute; right: 24px;">Show less

	3a. Sales commissions per unit $20,000.00selected answer incorrect Number of units sold 1selected answer incorrect Total sales commission $20,000 Fixed portion of sales representatives’ compensation not attempted Total direct selling expense $20,000 3b. The total indirect selling expense not attempted

Answer 1

Requirements:

1a	Direct Material per unit	$                         7.00
	Direct Labor per unit	$                         4.00
	Direct Manufacturing cost per unit	$                       11.00
	No. of units sold	20,000
	Total Direct manufacturing cost	$            220,000.00
1b	Variable manufacturing overhead per unit	$                         1.50
	Fixed manufacturing Overhead per unit	$                         5.00
	Indirect Manufacturing cost per unit	$                         6.50
	No. of units sold	20,000
	Total Indirect manufacturing cost	$            130,000.00
2a	Direct Material per unit	$                         7.00
	Direct Labor per unit	$                         4.00
	Variable manufacturing overhead per unit	$                         1.50
	Fixed manufacturing Overhead per unit	$                         5.00
	Total Manufacturing cost per unit	$                       17.50
	No. of units sold	20,000
	Total Direct Costs	$            350,000.00
2b	Total Indirect Costs	$                              -
3a	Sales Commission per unit	$                         1.00
	No. of units sold	20,000
	Total Sales Commission	$               20,000.00
[20000 units x $3.5] - $50000	Fixed portion of sales representative compensation	$               20,000.00
	Total direct selling expense	$               40,000.00
3b	Total Indirect Selling Expense	$               50,000.00