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Kubin Company's relevant range of production is 1 8 , 0 0 0 to 2 2 , 0 0 0 units. When it produces and
Kubin Company's relevant range of production is to units. When it produces and
Sells units, its average costs per unit are as follows:
Average cost per Unit
Direct Materials $
Direct Labor $
Variable manufacturing overhead $
Fixed manufacturing overhead $
Fixed selling expense $
Fixed administrative expense $
Sales commissions $
Variable administrative expense $
SOLVE THE FOLLOWING:
Assume the cost object is units of production
a What is the total direct manufacturing cost incurred to make units?
b What is the total indirect manufacturing cost incurred to make units.
Assume the cost object is the Manufacturing Department and that its total output is 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?
Assume the cost object is the company's various sales representative. Furthermore, assume
that the company spent $ of its 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 units, what is the total direct selling expense that can be
readily traced to individual sales representatives?
b When the company sells units, what is the total indirect selling expense that
cannot be readily traced to individual sales representatives?
Are Kubin's administrative expenses always going to be treated as indirect costs in its internal
management reports?
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