ACC 222 Chapter Notes - Chapter 2: Radiography, Variable Cost, Fixed Cost
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Kubin Company’s 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 |
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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3. Assume the cost object is the company’s 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 representatives’ 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 company’s 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 representatives’ 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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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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Kubin Company’s relevant range of production is 23,000 to 27,500units. When it produces and sells 25,250 units, its average costsper unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 8.30 |
| Direct labor | $ | 5.30 |
| Variable manufacturingoverhead | $ | 2.80 |
| Fixed manufacturingoverhead | $ | 6.30 |
| Fixed selling expense | $ | 4.80 |
| Fixed administrativeexpense | $ | 3.80 |
| Sales commissions | $ | 2.30 |
| Variable administrativeexpense | $ | 1.80 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make25,250 units?
b. What is the total indirect manufacturing cost incurred tomake 25,250 units?
2. Assume the cost object is the Manufacturing Department andthat its total output is 25,250 units.
a. How much total manufacturing cost is directly traceable tothe Manufacturing Department?
b. How much total manufacturing cost is an indirect cost thatcannot be easily traced to the Manufacturing Department?
3. Assume the cost object is the company’s various salesrepresentatives. Furthermore, assume that the company spent $95,950of its total fixed selling expense on advertising and the remainderof the total fixed selling expense comprised the fixed portion ofthe company's sales representatives’ compensation.
a. When the company sells 25,250 units, what is the total directselling expense that can be readily traced to individual salesrepresentatives?
b. When the company sells 25,250 units, what is the totalindirect selling expense that cannot be readily traced toindividual sales representatives?
ufacturing cost incurred to make 23,000 units?
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| 2a. | Direct materialsper unit | |
| Direct labor perunit | ||
| Variablemanufacturing overhead per unit | ||
| Fixed manufacturingoverhead per unit | ||
| Total manufacturingcost per unit | $0.00 | |
| Number of unitssold | ||
| Total directcosts | $0 | |
| 2b. | Total indirectcosts |
3a
| sales commissionsper unit | ||
| number of unitssold | ||
| total salescommission | $0 | |
| Fixed portion ofsales representatives' compensation | ||
| total directselling expense | $0.00 | |
| 3b | Total indirectselling expense | |
