Question

Kubin Company’s relevant range of production is 23,000 to 27,500 units. When it produces and sells 25,250 units, its average costs per unit are as follows:

  

	Average Cost per Unit
Direct materials	$	8.30
Direct labor	$	5.30
Variable manufacturing overhead	$	2.80
Fixed manufacturing overhead	$	6.30
Fixed selling expense	$	4.80
Fixed administrative expense	$	3.80
Sales commissions	$	2.30
Variable administrative expense	$	1.80

Required:

1. For financial accounting purposes, what is the total amount of product costs incurred to make 25,250 units?

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 25,250 units?

3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,500 units?

4. For financial accounting purposes, what is the total amount of period costs incurred to sell 23,000 units?

(For all requirements, do not round intermediate calculations.)

Answer 1

1.

Direct material (25,250*$8.30)	$209,575
Direct labor (25,250*$5.30)	133,825
Variable manufacturing overhead (25,250*$2.80)	70,700
Fixed manufacturing overhead (25,250*$6.30)	159,075
Total product costs	$573,175

2.

Fixed selling expense (25,250*$4.80)	$121,200
Fixed administrative expense (25,250*$3.80)	95,950
Sales commission (25,250*$2.30)	58,075
Variable administrative expense (25,250*$1.80)	45,450
Total period costs	$320,675

3.

Direct material (27,500*$8.30)	$228,250
Direct labor (27,500*$5.30)	145,750
Variable manufacturing overhead (27,500*$2.80)	77,000
Fixed manufacturing overhead	159,075
Total product costs	$610,075

4.

Fixed selling expense	$121,200
Fixed administrative expense	95,950
Sales commission (23,000*$2.30)	52,900
Variable administrative expense (23,000*$1.80)	41,400
Total period costs	$311,450