Kubin Company’s relevant range of production is 29,000 to 33,000 units. When it

Question

Kubin Company’s relevant range of production is 29,000 to 33,000 units. When it produces and sells 31,000 units, its average costs per unit are as follows:

  

Required:

3. For financial accounting purposes, what is the total amount of product costs incurred to make 33,000 units?

4. For financial accounting purposes, what is the total amount of period costs incurred to sell 29,000 units?

Average Cost per Unit Direct materials $ 8.90 Direct labor $ 5.90 Variable manufacturing overhead $ 3.40 Fixed manufacturing overhead $ 6.90 Fixed selling expense $ 5.40 Fixed administrative expense $ 4.40 Sales commissions $ 2.90 Variable administrative expense $ 2.40

Explanation / Answer

3. For financial accounting purposes, what is the total amount of product costs incurred to make 33,000 units

4) For financial accounting purposes, what is the total amount of period costs incurred to sell 29,000 units

Period cost = (2.40+2.90*29000)+(5.40+4.40*31000) = 457500

Direct material 8.90 Direct labour 5.90 Variable manufacturing overhead 3.40 Fixed manufacturing overhead 6.90 Product cost per unit 25.10 Units 33000 Total amount of product cost 828300

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