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Exercise 1-10 Differential Costs and Sunk Costs [LO1-5] Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000
Exercise 1-10 Differential Costs and Sunk Costs [LO1-5] Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 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 $ 7.00 $ 4.00 $1.50 $ 5.00 3.50 $ 2.50 $ 1.00 $0.50 Required 1. What is the incremental manufacturing cost incurred if the company increases production from 20,000 to 20,001 units? 2. What is the incremental cost incurred if the company increases production and sales from 20,000 to 20,001 units? 3. Assume that Kubin Company produced 20,000 units and expects to sell 19,800 of them. If a new customer unexpectedly emerges and expresses interest in buying the 200 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 20,000 units and expects to sell 19,800 of them. If a new customer unexpectedly emerges and expresses interest in buying the 200 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? Complete this question by entering your answers in the tabs below Required 1Required 2 Required 3 Required 4 Complete this question by entering your answers in the tabs below. Required 1Required 2Required 3 Required 4 What is the incremental manufacturing cost incurred if the company increases production from 20,000 to 20,001 units? (Round your answers to 2 decimal places.) Direct materials Direct labor Variable manufacturing overhead Total incremental cost $ 0.00 Required Required 2> Required 1Required 2 Required 3 Required 4 What is the incremental cost incurred if the company increases production and sales from 20,000 to 20,001 units? (Round your answers to 2 decimal places.) Direct materials Direct labor Variable manufacturing overhead Sales commissions Variable administrative expense Variable cost per unit sold 0.00 Required 1 Required 3> Required 1 Required 2 Required 3 Required 4 Assume that Kubin Company produced 20,000 units and expects to sell 19,800 of them. If a new customer unexpectedly emerges and expresses interest in buying the 200 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? (Round your answers to 2 decimal places.) Show less Sales commission Variable administrative expense Variable cost per unit sold $ 0.00 Required 3 Required 4
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