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:

	Amount 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. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold?

2. If 22,000 units are produced and sold, what is the variable cost per unit produced and sold?

3. If 18,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

4. If 22,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

5. If 18,000 units are produced, what is the average fixed manufacturing cost per unit produced?

6. If 22,000 units are produced, what is the average fixed manufacturing cost per unit produced?

7. If 18,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

8. If 22,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

What do you add to get the totals for the listed above

Answer 1

1
Direct materials	7.00
Direct labor	4.00
Variable manufacturing overhead	1.50
Sales commissions	1.00
Variable administrative expense	0.50
Variable cost per unit produced and sold	14.00
2
Direct materials	7.00
Direct labor	4.00
Variable manufacturing overhead	1.50
Sales commissions	1.00
Variable administrative expense	0.50
Variable cost per unit produced and sold	14.00
3
Unit produced and sold	18000
X Variable cost per unit	14.00
Total amount of variable cost	252000
4
Unit produced and sold	22000
X Variable cost per unit	14.00
Total amount of variable cost	308000
5
Fixed manufacturing costs	100000	=20000*5
Divide by units	18000
Average fixed manufacturing cost per unit	5.56
6
Fixed manufacturing costs	100000	=20000*5
Divide by units	22000
Average fixed manufacturing cost per unit	4.55
7
Total amount of fixed manufacturing overhead	100000	=20000*5
8
Total amount of fixed manufacturing overhead	100000	=20000*5