Question

1)

Required information Cost Classifications (Algo) The following information applies to the questions displayed below.) Kubin Company's relevant range of production is 29,000 to 33,000 units. When it produces and sells 31,000 units, its average costs per unit are as follows: 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 $8.90 $5.90 $3.40 $6.90 $5.40 $4.40 $2.90 $2.40

2)

Answer 1

Solution:

1)

1)

Calculate the variable cost per unit produced and sold:

Particulars	Amount
Direct materials	$8.90
Direct labor	$5.90
Variable manufacturing overhead	$3.40
Sales commission	$2.90
variable administrative overhead	$2.40
variable cost per unit produced and sold	$23.5

2)

Calculate the variable cost per unit produced and sold:

Particulars	Amount
Direct materials	$8.90
Direct labor	$5.90
Variable manufacturing overhead	$3.40
Sales commission	$2.90
variable administrative overhead	$2.40
variable cost per unit produced and sold	$23.5

3)

Calculate the total amount of variable cost:

Particulars	Amount
Units produced and sold	29,000
variable cost per unit	$23.5
Total amount of variable cost	$681,500

4)

Calculate the total amount of variable cost:

Particulars	Amount
Units produced and sold	33,000
variable cost per unit	$23.5
Total amount of variable cost	$775,500

5)

Calculate the average fixed manufacturing per unit:

Particulars	Amount
Total fixed manufacturing costs (31,000* $6.90)	$213,900
Units produced	29,000
Average fixed manufacturing per unit ($213,900/29,000)	$7.37

6)

Calculate the average fixed manufacturing per unit:

Particulars	Amount
Total fixed manufacturing costs (31,000* $6.90)	$213,900
Units produced	33,000
Average fixed manufacturing per unit ($213,900/29,000)	$6.48

7)

Calculate the total fixed manufacturing costs:

Particulars	Amount
Fixed manufacturing overhead per unit	$6.90
Units produced	31,000
Total fixed manufacturing costs	$213,900

8)

Calculate the total fixed manufacturing costs:

Particulars	Amount
Fixed manufacturing overhead per unit	$6.90
Units produced	31,000
Total fixed manufacturing costs	$213,900

2)

a)

Product cost of 5000 units:
Material (5000*5.6)	$28,000
Labour (5,000*3.9)	$19,500
variable manufacturing overhead (5,000*1.5)	$7,500
Fixed manufacturing overhead	$22,500
Total product cost	$77,500

b)

Total period cost of 5,000 units
Sales commission (5000*0.5)	$2,500
Admin expenses (5,000*0.4)	$2,000
Fixed selling and administrative expenses	$7,500
Total period cost of 5,000 units	$12,000

c)

Contribution per unit:

Selling price	$23.10
less: variable cost
Material	($5.6)
Labour	($3.9)
Manufacturing overhead	($1.5)
Sales commission	($0.5)
Administrative expenses	($0.4)
CM per unit	$11.2

d)

Direct manufactuirng cost:

Material (6,000*5.6)	$33,600
Labour (6,000*3.9)	$23,400
Total direct mfg cost	$57,000

e)

Total indirect mfg cost:

Variable mfg overhead (6,000*1.5)	$9,000
Fixed mfg overheads	$22,500
Total indirect mfg cost	$31,500

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