Question

Kubin Company's relevant range of production is 26,000 to 35,500 units. When it produces and sells 30,750 units, its average costs per unit are as follows: 

	expense Average Cost per Unit
Direct materials	$ 8.60
Direct labor	$ 5.60
Variable manufacturing overhead	$ 3.10
Fixed manufacturing overhead	$ 6.60
Fixed selling expense	$ 5.10
Fixed administrative expense	$ 4.10
Sales commissions	$ 2.60
Variable administrative	$ 2.60

Required:

 1. For financial accounting purposes, what is the total amount of product costs incurred to make 30,750 units?

 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 30.750 units?

 3. For financial accounting purposes, what is the total amount of product costs incurred to make 35,500 units?

 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 26,000 units?

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

1. Total amount of product costs 

2. Total amount of period costs incurred 

3. Total amount of product costs 

4. Total amount of period costs

Answer 1

# 1 is incorrect.

Answer is:

direct materials 8.6

direct labor 5.6

fixed manufacturing overhead 6.6

variable manufacturing overhead 3.1

cost per units 23.9 x 30,750 = 734,925

# 2 is correct - 427,425

#3 is incorrect

answer is:

direct materials 8.6

direct labo 5.6

fixed manufacturing overhead (6.6*30750/35500 = 5.7169)

variable manufacturing overhead 3.1

total per unit 23.0169

x 35,500 units = 817,100

#4 is incorrect

answer is:

fixed selling expense (5.1*30750/26000 = 6.03173)

fixed admin expense (4.1/30750/26000 = 4.84904)

fixed selling & admin = 10.8808 x 26,000 = 282,900

sales commission 2.6

variable admin expense 2.1

total variable selling and admin or unit: 4.7 x 26000 = 122,200

282,900 + 122,200 = 405,100

Answer 2

1. Total amount of product costs

direct material 8.60

direct labour 5.60

fixed manufacturing overhead 6.60

varible manufacturing overhead 3.10

fixed administrative expenses 4.10  

variable admnistrative expenses 2.10

Total product cost per unit       30.1 x number of units produced 30,750

Total amount of product costs = 30.1 x 30750 = 9,25575

2. Total amount of period cost

fixed selling expenses 5.10

fixed adminisrative expenses 4.10

sales commission 2.60

variable administrative expenses 2.10

total amount of perod cost 13.9 x number of units produced 30750

Total amountofperiod cost = 13.9 x 30750 = 4,27425

3. Total amount of product cost for 35,500 units

direct material 8.60

direct labour 5.60

fixed manufacturing overhead 6.60

varible manufacturing overhead 3.10

fixed administrative expenses 4.10  

variable admnistrative expenses 2.10

Total product cost per unit       30.1 x number of units produced 35,500

Total amount of product costs = 30.1 x 35,500 = 10,68550

4. Total amount of period cost for 26,000 units

fixed selling expenses 5.10

fixed adminisrative expenses 4.10

sales commission 2.60

variable administrative expenses 2.10

total amount of perod cost 13.9 x number of units produced 26,000

Total amount of period cost = 13.9 x 26,000 = 3,61400