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Kubin Company’s relevant range of production is 12,000 to 16,000 units. When it produces and sells 14,000 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials $ 7.30
Direct labor $ 4.30
Variable manufacturing overhead $ 1.80
Fixed manufacturing overhead $ 5.30
Fixed selling expense $ 3.80
Fixed administrative expense $ 2.80
Sales commissions $ 1.30
Variable administrative expense $ 0.80
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 14,000 units?
b. What is the total indirect manufacturing cost incurred to make 14,000 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 14,000 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 $39,200 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 14,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 14,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 14,000 units?
b. What is the total indirect manufacturing cost incurred to make 14,000 units?
Note: For all the requirements, round per unit values to 2 decimal places.
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1a. Direct material cost per unit
1a. Direct labor cost per unit
1a. Direct manufacturing cost per unit $0.00
1a. Number of units produced and sold
1a. Total direct manufacturing cost $0
1b. Variable manufacturing overhead per unit
1b. Fixed manufacturing overhead per unit
1b. Indirect manufacturing cost per unit $0.00
1b. Number of units produced and sold
1b. Total indirect manufacturing cost $0
