ADM 2341 Study Guide - Final Guide: Income Approach, Contribution Margin, Job Satisfaction
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6 Feb 2015
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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 |
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?
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