Question

Exercise 1-7 Direct and Indirect Costs (LO1-1) Kubin Company's relevant range of production is 13,000 to 18,000 units. When it produces and sells 15,500 units, its average costs per unit are as follows: points eBook Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $ 7.40 $ 4.40 $ 1.90 $ 5.40 $ 3.90 $ 2.90 $ 1.40 $ 0.90 Print References Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 15,500 units? b. What is the total indirect manufacturing cost incurred to make 15,500 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 15,500 units. a. How much total manufacturing cost is directly traceable to the Manufacturing Department? b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department? 3. Assume the cost object is the company's various sales representatives. Furthermore, assume that the company spent $44,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives' compensation. a. When the company sells 15,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives? b. When the company sells 15,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Answer 1

Answers Direct Material Cost Per Unit Direct Labor Cost per Unit Direct Manufacturing cost per Unit Number of Units Sold Total Direct Manufacturing Cost 7.40 4.40 11.80 15,500 182900 Variable Manufacturing OH per Unit Fixed Manufacturing OH Per Unit Indirect Manufacturing Cost Per Unit Number of Units Sold Total Indirect Manufacturing Cost 1.90 5.40 7.30 15,500 113150 Direct Material Cost Per Unit Direct Labor Cost per Unit Variable Manufacturing OH per Unit Fixed Manufacturing OH Per Unit Total Manufacturing Cost per Unit Number of Units Sold Total Direct Cost Total indirect Cost 7.40 4.40 1.90 5.40 19.101 15,500 296050 2b

За 1.40 15,500 21700 Sales Commission per Unit Number of Uint Sold Total Sales Commission Fixed portion of Sales Compensation (3.9*15500)- 44950 Total Direct Selling Expenses Total Indirect Selling Expenses 15500 37200 44950 3b)