Question

Need help with all 4 questions

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: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed Sales commissions S 7.40 s 4.40 s 1.90 s 5.40 $3.90 $2.90 s 1.40 $ 0.90 rative expense Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 15,500 to 15,501 units? 2. What is the incremental cost incurred i 3. Assume that Kubin Company produced 15,500 units and expects to sell 15,260 of them. If a new customer unexpectedly emerges and expresses interest in buying the 240 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer? 4. Assume that Kubin Company produced 15,500 units and expects to sell 15,260 of them. If a new customer unexpectedly emerges and expresses interest in buying the 240 extra units that have been produced by the company and that would otherwise remain unsold, what incremental selling and administrative cost per unit is incurred to sell these units to the customer? if the company increases production and sales from 15,500 to 15,501 units? Required 1 Required 2 Required 3 Required 4 What is the incremental manufacturing cost incurred if the company increases production from 15,500 to 15,501 units? (Round your answers to 2 decimal places.) Variable 0.00 < Prev 5 of 10 Next >

Answer 1

Answers

• All working forms part of the answer
• Manufacturing cost does not include selling and administrative cost.
• Requirement 1

Direct Materials	$                     7.40
Direct Labor	$                     4.40
Variable Manufacturing Overhead	$                     1.90
Total incremental cost	$                   13.70

• Requirement 2

Direct Materials	$                     7.40
Direct Labor	$                     4.40
Variable Manufacturing Overhead	$                     1.90
Sales commissions	$                     1.40
Variable administrative expense	$                     0.90
Variable cost per unit sold	$                   16.00

• Requirement 3

Answer = $ 0 = Incremental cost.
This is because these units are already produced and manufacturing cost has already been incurred.
No additional incremental cost will be incurred if these are sold.

• Requirement 4

Sales Commission	$                     1.40
Variable administrative expense	$                     0.90
Variable cost per unit sold	$                     2.30