Question

Kubin Company’s relevant range of production is 15,000 to 19,000 units. When it produces and sells 17,000 units, its average costs per unit are as follows:

  

	Average Cost per Unit
Direct materials	$	7.60
Direct labor	$	4.60
Variable manufacturing overhead	$	2.10
Fixed manufacturing overhead	$	5.60
Fixed selling expense	$	4.10
Fixed administrative expense	$	3.10
Sales commissions	$	1.60
Variable administrative expense	$	1.10

Required:

1. For financial accounting purposes, what is the total amount of product costs incurred to make 17,000 units?

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 17,000 units?

3. For financial accounting purposes, what is the total amount of product costs incurred to make 19,000 units?

4. For financial accounting purposes, what is the total amount of period costs incurred to sell 15,000 units?

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

Answer 1

1. Computation of Product Cost for 17000 Unit
Particcular	Amount	Working
Direct materials	1,29,200	17000*7.60
Direct labour	78,200	17000*4.60
Variable Manufacturing overhead	35,700	17000*2.10
Fixed manufacturing overhead	95,200	17000*5.60
Total Product Cost	3,38,300
Computation Total amount of period costs incurred to sell 17,000 units...
Particcular	Amount	Working
Fixed selling Expenses	69,700	17000*4.10
Fixed administrative expenses	52,700	17000*3.10
Variable administrative expenses	18,700	17000*1.10
Sales commission	27,200	17000*1.60
Total period costs	1,68,300
. Computation of Product Cost for 19000 Unit
Particcular	Amount	Working
Direct materials	1,44,400	19000*7.60
Direct labour	87,400	19000*4.60
Variable Manufacturing overhead	39,900	19000*2.10
Fixed manufacturing overhead	95,200	17000*5.60
Total Product Cost	3,66,900
Computation Total amount of period costs incurred to sell 15,000 units...
Particcular	Amount	Working
Fixed selling Expenses	69,700	17000*4.10
Fixed administrative expenses	52,700	17000*3.10
Variable administrative expenses	16,500	15000*1.10
Sales commission	24,000	15000*1.60
Total period costs	1,62,900