Question

Kubin Company's relevant range of production is 22,000 to 27,000 units. When it produces and sells 24,500 units, its average costs per unit are as follows: Average Cost per Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense $8.20 $ 5.20 $ 2.70 $ 6.20 $ 4.70 $ 3.70 $ 2.20 $1.70 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,500 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 22,000 units? (For all requirements, do not round intermediate calculations.)

Answer 1

$200,900 1 1 2 Direct materials 3 Direct labor 4 Variable manufacturing overhead 5 Fixed manufacturing overhead 6 Total amount of product costs $127,400 $66.150 $151.900 $546,350 $115,150 $90,650 $53,900 $41.650 $301,350 8 2 9 Fixed selling expenses 10 Fixed administrative expenses 11 Sales commissions 12 Variable administrative expenses 13 Total amount of period costs 14 15 3 16 Direct materials 17 Direct labor 18 Variable manufacturing overhead 19 Fixed manufacturing overhead 20 Total amount of product costs $221,400 $140.400 $72.900 $151.900 $586,600 22 4 23 Fixed selling expenses 24 Fixed administrative expenses 25 Sales commissions 26 Variable administrative expenses 27 Total amount of period costs $115,150 $90.650 $48,400 $37.400 $291,600

Calculations are shown below: 1 1 2 Direct materials 3 Direct labor 4 Variable manufacturing overhead 5 Fixed manufacturing overhead 6 Total amount of product costs =24500*8.2 =24500*5.2 =24500*2.7 =24500*6.2 =SUM(B2:B5) =24500*4.7 =24500*3.7 =24500*2.2 =24500*1.7 =SUM(B9:B12) 8 2 9 Fixed selling expenses 10 Fixed administrative expenses 11 Sales commissions 12 Variable administrative expenses 13 Total amount of period costs 14 15 3 16 Direct materials 17 Direct labor 18 Variable manufacturing overhead 19 Fixed manufacturing overhead 20 Total amount of product costs =27000*8.2 =27000*5.2 =27000*2.7 =B5 =SUM(B16:B19) 224 23 Fixed selling expenses 24 Fixed administrative expenses 25 Sales commissions 26 Variable administrative expenses 27 Total amount of period costs =B9 =B10 =22000*2.2 =22000*1.7 =SUM(B23:B26)