Kubin Company\'s relevant range of production is 29,000 to 33,000 units. When t

Question

Kubin Company's relevant range of production is 29,000 to 33,000 units. When t produces and selils 31,000 units, ts average costs per unit are as follows: Cost per Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling e Fixed administrative expense Sales commissions Variable administrative expense s 8.90 $ 5.90 s 3.40 s 6.90 $ 5.48 s 4.40 s 2.90 s 2.40 Required 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 31,000 units? 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 es 1. For financial accounting purposes, what is the total amount of product costs incurred to make 31,000 units? (For all requirements, do not round intermediate calculations.) 1 Total amount of

Explanation / Answer

Answer:

First let us calculate total fixed expenses from the given average cost per unit for an activity level of 31,000 units.

The above calculated fixed cost will remain same for any level of activity.

1. Calculation of total amount of product cost incurred to make 31,000 units

direct materials

[31,000 * $8.90]

direct labor

[31,000 * $5.90]

variable manufacturing overhead

[31,000 * $3.40]

2. Calculation of total amount of period cost incurred to sell 31,000 units

sales commission

[31,000 * $2.90]

variable administrative expense

[31,000 * $2.40]

3. Calculation of total amount of product cost incurred to make 33,000 units

direct materials

[33,000 * $8.90]

direct labor

[33,000 * $5,90]

variable manufacturing overhead

[33,000 * $3.40]

4. Calculation of total amount of period cost incurred to sell 29,000 units.

sales commission

[29,000 * $2.90]

variable administrative expenses

[29,000 * $2.40]

particulars $

direct materials

[31,000 * $8.90]

275,900

direct labor

[31,000 * $5.90]

182,900

variable manufacturing overhead

[31,000 * $3.40]

105,400 fixed manufacturing overhead 213,900 total product cost 778,100

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