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?
In: Accounting
Problem 18-7B Break-even analysis with composite units P4
Milano Co. manufactures and sells three products: product 1, product 2, and product 3. Their unit selling prices are product 1, $40; product 2, $30; and product 3, $20. The per unit variable costs to manufacture and sell these products are product 1, $30; product 2, $15; and product 3, $8. Their sales mix is reflected in a ratio of 6:4:2. Annual fixed costs shared by all three products are $270,000. One type of raw material has been used to manufacture products 1 and 2. The company has developed a new material of equal quality for less cost. The new material would reduce variable costs per unit as follows: product 1 by $10 and product 2 by $5. However, the new material requires new equipment, which will increase annual fixed costs by $50,000.
Required
Check (1) Old plan break-even, 1,875 composite units
(2) New plan break-even, 1,429 composite units (rounded)
Analysis Component
In: Accounting
Kubin Company’s relevant range of production is 11,000 to 14,000 units. When it produces and sells 12,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 7.20 |
| Direct labor | $ | 4.20 |
| Variable manufacturing overhead | $ | 1.70 |
| Fixed manufacturing overhead | $ | 5.20 |
| Fixed selling expense | $ | 3.70 |
| Fixed administrative expense | $ | 2.70 |
| Sales commissions | $ | 1.20 |
| Variable administrative expense | $ | 0.70 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 12,500 units?
b. What is the total indirect manufacturing cost incurred to make 12,500 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 12,500 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 $33,750 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 12,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 12,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Kubin Company’s relevant range of production is 21,000 to 25,000 units. When it produces and sells 23,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 8.10 Direct labor $ 5.10 Variable manufacturing overhead $ 2.60 Fixed manufacturing overhead $ 6.10 Fixed selling expense $ 4.60 Fixed administrative expense $ 3.60 Sales commissions $ 2.10 Variable administrative expense $ 1.60 Required:
1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 23,000 units?
b. What is the total indirect manufacturing cost incurred to make 23,000 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 23,000 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 $82,800 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 23,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 23,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
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. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 17,000 units?
b. What is the total indirect manufacturing cost incurred to make 17,000 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 17,000 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 $52,700 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 17,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 17,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Finance
Kubin Company’s relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 9.00 |
| Direct labor | $ | 6.00 |
| Variable manufacturing overhead | $ | 3.50 |
| Fixed manufacturing overhead | $ | 7.00 |
| Fixed selling expense | $ | 5.50 |
| Fixed administrative expense | $ | 4.50 |
| Sales commissions | $ | 3.00 |
| Variable administrative expense | $ | 2.50 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 32,500 units?
b. What is the total indirect manufacturing cost incurred to make 32,500 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 32,500 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 $146,250 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 32,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 32,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Kubin Company’s relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 9.00 |
| Direct labor | $ | 6.00 |
| Variable manufacturing overhead | $ | 3.50 |
| Fixed manufacturing overhead | $ | 7.00 |
| Fixed selling expense | $ | 5.50 |
| Fixed administrative expense | $ | 4.50 |
| Sales commissions | $ | 3.00 |
| Variable administrative expense | $ | 2.50 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 32,500 units?
b. What is the total indirect manufacturing cost incurred to make 32,500 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 32,500 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 $146,250 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 32,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 32,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
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: Average Cost 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. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 15,500 units? b. What is the total indirect manufacturing cost incurred to make 15,500 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 15,500 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 $44,950 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 15,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives? b. When the company sells 15,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Kubin Company’s relevant range of production is 20,000 to 23,000 units. When it produces and sells 21,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 8.00 |
| Direct labor | $ | 5.00 |
| Variable manufacturing overhead | $ | 2.50 |
| Fixed manufacturing overhead | $ | 6.00 |
| Fixed selling expense | $ | 4.50 |
| Fixed administrative expense | $ | 3.50 |
| Sales commissions | $ | 2.00 |
| Variable administrative expense | $ | 1.50 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 21,500 units?
b. What is the total indirect manufacturing cost incurred to make 21,500 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 21,500 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 $75,250 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 21,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 21,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Define each of the following resources.
7.1. Central park:
7.2. I-95 interstate thruway from Maine to Florida:
7.3. Fish in a stream in NY State:
7.4. US Navy medical hospital supply ship now docked in NYC:
7.5. Zoom:
In: Economics