Kubin Company’s relevant range of production is 30,000 to 35,000 units. When it
ID: 2602383 • Letter: K
Question
Kubin Company’s relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as follows:
5. If 30,000 units are produced, what is the average fixed manufacturing cost per unit produced?
6. If 35,000 units are produced, what is the average fixed manufacturing cost per unit produced?
Amount per Unit Direct materials $ 9.00 Direct labor $ 6.00 Variable manufacturing overhead $ 3.50 Fixed manufacturing overhead $ 7.00 Fixed selling expense $ 5.50 Fixed administrative expense $ 4.50 Sales commissions $ 3.00 Variable administrative expense $ 2.505. If 30,000 units are produced, what is the average fixed manufacturing cost per unit produced?
6. If 35,000 units are produced, what is the average fixed manufacturing cost per unit produced?
Explanation / Answer
5. AVERAGE FIXED MANUFACTURING COST PER UNIT(At 30000):
=Total Fixed Manufacturing Overhead at normal capacity/No. of units produced
=227000/30000
=$7.58
6. AVERAGE FIXED MANUFACTURING COST PER UNIT(At 35000):
=Total Fixed Manufacturing Overhead at normal capacity/No. of units produced
=227000/35000
=$6.5
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