Question

Required information [The following information applies to the questions displayed below.) Kubin Company's relevant range of production is 20,000 to 23,000 units. When it produces and sells 21,500 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 $8.00 $5.00 $2.50 $6.00 $4.50 $3.50 $2.00 $1.50 Required: 1. If 20,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 23,000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 20,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 4. If 23,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 5. If 20,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 23.000 units are produced, what is the average fixed manufacturing cost per unit produced? 7. If 20,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? 8. If 23,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production? (Round per unit values to 2 decimal places.) 20,000 Units 23,000 Units 1. & 2. Variable cost per unit produced and sold 3. & 4. Total amount of variable cost related to units produced and sold 5. & 6. Average fixed manufacturing cost per unit produced 7. & 8. Total amount of foxed manufacturing overhead

Answer 1

1.	Amount(in $)	Workings
Direct materials	8.00
Direct labor	5.00
Variable manufacturing overhead	2.50
Sales commissions	2.00
Variable administrative expense	1.50
Variable cost per unit produced and sold	19.00
2
Direct materials	8.00
Direct labor	5.00
Variable manufacturing overhead	2.50
Sales commissions	2.00
Variable administrative expense	1.50
Variable cost per unit produced and sold	19.00
3
Unit produced and sold	20,000
X Variable cost per unit	19.00
Total amount of variable cost(20,000*19)	380,000
4
Unit produced and sold	23,000
X Variable cost per unit	19.00
Total amount of variable cost(23,000*19)	437,000
5
Fixed manufacturing costs	129,000	=21,500*6
Divide by units	20,000
Average fixed manufacturing cost per unit	6.45
6
Fixed manufacturing costs	129,000	=21,500*6
Divide by units	23,000
Average fixed manufacturing cost per unit	5.61
7
Total amount of fixed manufacturing overhead	129,000	=21,500*6
8
Total amount of fixed manufacturing overhead	129,000	=21,500*6