Question

ULU Chapter 1 Homework problems Saved Help Save Kubin Company's relevant range of production is 27,000 to 29,000 units. When it produces and sells 28.000 units its average per unit are as follows: points Average Cost per Unit $ 8.79 $ 5.70 $ 3.20 $ 6.70 . - $ 5.20 $ 4.20 $ 2.70 $ 2.20 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense eBook Print References Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 28,000 units? b. What is the total indirect manufacturing cost incurred to make 28,000 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 28,000 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 1700 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 28,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives? b. When the company sells 28,000 units, what is the total indirect selling expense that cannot be readily traced to individual sale representatives? Complete this question by entering your answers in the tabs below. 1 Required 2 Required 3

Answer 1

Answer :-

1)a)Total Direct Manufacturing Cost = (Direct Material cost + Direct Labor Cost ) × No. Of unit sold

Direct Material Cost = $ 8.70

Direct Labor cost = $ 5.70

No. of Unit sold = 28,000

Total Direct Manufacturing Cost = ( $ 8.70 + $ 5.70 ) × 28,000

Total Direct Manufacturing Cost = $ 403,200

1)b)Total indirect Manufacturing Cost = ( Variable Manufacturing Overhead Cost + Fixed Manufacturing Overhead Cost) × No of unit Sold

Given,

Variable Manufacturing Overhead Cost - $ 3.20

Fixed Manufacturing Overhead Cost - $ 6.70

No. Of unit sold = 28,000

Total indirect Manufacturing Cost = ( $ 3.20 + $ 6.70 ) × 28,000 unit

Total indirect Manufacturing Cost = $ 277,200

2)a)Total Manufacturing Cost is directly traceable to Manufacturing Department -

	Cost per unit
Direct Material	$ 8.70
Direct Labor	$ 5.70
Variable Manufacturing Overhead	$ 3.20
Fixed Manufacturing Overhead	$ 6.70
Total Direct Cost	$24.30
No. of unit sold	28,000 unit
Total Manufacturing Cost ( Total Direct Cost × Unit Sold)	$ 680,400

2)b) Zero - Total Manufacturing Cost is an indirect costs that cannot be easily traced to Manufacturing Department as none of the Manufacturing Cost should be treated as Indirect cost.

Answer - Total indirect cost - Zero

3)a)

	Cost Per unit
Sales commission	2.70
Number of units sold	28,000
Total sales commission ( Sale commission per unit × No.of unit sold)	$75,600
Fixed portion of sales representatives' compensation = ( Fixed selling expense × No of unit sold) - Advertising Expense = ($5.20 × 28,000 unit ) - $117,600	$28,000
Total direct selling expense	$103,600
3b. Total indirect selling expense ( Note - 1)	$117600

Notes -1)The advertising expense cannot be traced to specific sales representative.Thus,$ 117,600 is Total indirect selling expense.