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In: Accounting

Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells...

Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells 15,500 units, its average costs per unit are as follows: Amount per Unit Direct materials $ 7.40 Direct labor $ 4.40 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 5.40 Fixed selling expense $ 3.90 Fixed administrative expense $ 2.90 Sales commissions $ 1.40 Variable administrative expense $ 0.90 Required: 1. If 13,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 13,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 4. If 18,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 5. If 13,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 18,000 units are produced, what is the average fixed manufacturing cost per unit produced? 7. If 13,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? 8. If 18,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? (Round per unit values to 2 decimal places.)

Solutions

Expert Solution

1
Direct materials 7.40
Direct labor 4.40
Variable manufacturing overhead 1.90
Sales commissions 1.40
Variable administrative expense 0.90
Variable cost per unit produced and sold 16.00
2
Direct materials 7.40
Direct labor 4.40
Variable manufacturing overhead 1.90
Sales commissions 1.40
Variable administrative expense 0.90
Variable cost per unit produced and sold 16.00
3
Unit produced and sold 13000
X Variable cost per unit 16.00
Total amount of variable cost 208000
4
Unit produced and sold 18000
X Variable cost per unit 16.00
Total amount of variable cost 288000
5
Fixed manufacturing costs 83700 =15500*5.40
Divide by units 13000
Average fixed manufacturing cost per unit 6.44
6
Fixed manufacturing costs 83700 =15500*5.40
Divide by units 18000
Average fixed manufacturing cost per unit 4.65
7
Total amount of fixed manufacturing overhead 83700 =15500*5.40
8
Total amount of fixed manufacturing overhead 83700 =15500*5.40

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