Question

Kubin Company’s relevant range of production is 19,000 to 20,000 units. When it produces and sells 19,500 units, its average costs per unit are as follows:

  

	Amount per Unit
Direct materials	$	7.90
Direct labor	$	4.90
Variable manufacturing overhead	$	2.40
Fixed manufacturing overhead	$	5.90
Fixed selling expense	$	4.40
Fixed administrative expense	$	3.40
Sales commissions	$	1.90
Variable administrative expense	$	1.40

Required:

1. If 19,000 units are produced and sold, what is the variable cost per unit produced and sold?

2. If 20,000 units are produced and sold, what is the variable cost per unit produced and sold?

3. If 19,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

4. If 20,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

5. If 19,000 units are produced, what is the average fixed manufacturing cost per unit produced?

6. If 20,000 units are produced, what is the average fixed manufacturing cost per unit produced?

7. If 19,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

8. If 20,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

(Round per unit values to 2 decimal places.)

(Round per unit values to 2 decimal places.)

(Round per unit values to 2 decimal places.) 19,000 units 20,000 units

1&2. Variable cost per unit produced and sold $

3&4. Total amount of variable cost related to units produced and sold

5&6 Average fixed manufacturing cost per unit produced

7&8 Total amount of fixed manufacturing overhead

Answer 1

Requirement 1
Direct Material	$7.90
Direct Labor	$4.90
Variable Manufacturing Overhead	$2.40
Sales Commission	$1.90
Variable Administrative Expenses	$1.40
Variable Cost per unit	$18.50
Requirement 2
Variable Cost per unit will be the same if 20,000 units are produced and sold and i.e. $18.50
Requirement 3
Units produced and Sold	$19,000
Variable Cost per unit	$18.50
Total Variable Cost	$351,500
Requirement 4
Units produced and Sold	$20,000
Variable Cost per unit	$18.50
Total Variable Cost	$370,000
Requirement 5
Fixed manufacturing cost (19,500 * $5.90) (A)	$115,050
Units producted (B)	19,000
Average Fixed manufacturing cost per unit produced (C = A/ B)	$6.06
Requirement 6
Fixed manufacturing cost (19,500 * $5.90) (A)	$115,050
Units producted (B)	20,000
Average Fixed manufacturing cost per unit produced (C = A/ B)	$5.75
Requirement 7
Total amount of Fixed manufacturing overhead	$115,050
(19,000 * $6.06)
Requirement 8
Total amount of Fixed manufacturing overhead	$115,050
(20,000 * $5.75)