Question

How do I find:

Total indirect costs?

Fixed portion of sales representatives compensation?

Total indirect selling expense?

Kubin Company's relevant range of production is 13.000 to 18.000 units. When It produces and sells 15,500 units, ts average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Pixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit s7.40 s 4.40 s 1.90 $ 5.40 3.90 2.90 s 1.40 s 0.90

Thank you

Answer 1

Answer

• All working forms part of the answer
• Requirement 2

2a	Direct Material per unit	$                     7.40
	Direct Labor per unit	$                     4.40
	Variable manufacturing overhead per unit	$                     1.90
	Fixed manufacturing Overhead per unit	$                     5.40
	Total Manufacturing cost per unit	$                   19.10
	No. of units sold	15,500
	Total Direct Costs	$        296,050.00
2b	Total Indirect Costs [Answer is $ 0, because all manufacturing cost are directly traceable to manufacturing department]	$                          -

• Requirement 3

3a	Sales Commission per unit	$                     1.40
	No. of units sold	15,500
	Total Sales Commission	$          21,700.00
[see note #1]	Fixed portion of sales representative compensation	$          15,500.00
	Total direct selling expense	$          37,200.00
3b	Total Indirect Selling Expense	$          44,950.00 [Advertising expense not traceable]

• Note #1 for Requirement 3’a’

Total Fixed Selling expense	[15500 units x $3.9]	$        60,450.00
Less: Spent on advertising		$        44,950.00
Fixed portion of sales representative compensation		$        15,500.00