Kubin Companyâs relevant range of production is 25,000 to 33,500 units. When it produces and sells 29,250 units, its average costs per unit are as follows:
| Average Cost per Unit |
| Direct materials | $ | 8.50 |
| Direct labor | $ | 5.50 |
| Variable manufacturing overhead | $ | 3.00 |
| Fixed manufacturing overhead | $ | 6.50 |
| Fixed selling expense | $ | 5.00 |
| Fixed administrative expense | $ | 4.00 |
| Sales commissions | $ | 2.50 |
| Variable administrative expense | $ | 2.00 |
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Required:
2. Assume the cost object is the Manufacturing Department and that its total output is 29,250 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?
2. Assume the cost object is the Manufacturing Department and that its total output is 29,250 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department? (Round per unit values to 2 decimal places.)
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
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| | | | | 2a. | Direct materials per unit | $8.50 | | Direct labor per unit | 5.50 | | Variable manufacturing overhead per unit | 3.00 | | Fixed manufacturing overhead per unit | 6.50 | | Total manufacturing cost per unit | $23.50 | | Number of units sold | 29,250 | | Total direct costs | $687,375 | | | | | 2b. | Total indirect costs | |
3. Assume the cost object is the companyâs various sales representatives. Furthermore, assume that the company spent $117,000 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 representativesâ compensation.
a. When the company sells 29,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 29,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
3. Assume the cost object is the companyâs various sales representatives. Furthermore, assume that the company spent $117,000 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 representativesâ compensation.
a. When the company sells 29,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives? (Round per unit value to 2 decimal places.)
b. When the company sells 29,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
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| | | | | 3a. | Sales commissions per unit | | | Number of units sold | | | Total sales commission | | | Fixed portion of sales representativesâ compensation | | | Total direct selling expense | | | | | | 3b. | The total indirect selling expense | | |
