Exercise 1-9 (Static) Fixed, Variable, and Mixed Costs [LO1-4]

Kubin Companys 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:

	Amount per Unit
Direct materials	$	7.00
Direct labor	$	4.00
Variable manufacturing overhead	$	1.50
Fixed manufacturing overhead	$	5.00
Fixed selling expense	$	3.50
Fixed administrative expense	$	2.50
Sales commissions	$	1.00
Variable administrative expense	$	0.50

Required:

1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold?

2. If 22,000 units are produced and sold, what is the variable cost per unit produced and sold?

3. If 18,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

4. If 22,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

5. If 18,000 units are produced, what is the average fixed manufacturing cost per unit produced?

6. If 22,000 units are produced, what is the average fixed manufacturing cost per unit produced?

7. If 18,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

8. If 22,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

		18,000 Units	22,000 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 fixed manufacturing overhead