Question
Kubin Companys relevant range of production is 12,000 to 16,000 units. When it produces and sells 14,000 units, its average costs per unit are as
Kubin Companys relevant range of production is 12,000 to 16,000 units. When it produces and sells 14,000 units, its average costs per unit are as follows:
Average Cost per Unit | ||
Direct materials | $ | 7.30 |
Direct labor | $ | 4.30 |
Variable manufacturing overhead | $ | 1.80 |
Fixed manufacturing overhead | $ | 5.30 |
Fixed selling expense | $ | 3.80 |
Fixed administrative expense | $ | 2.80 |
Sales commissions | $ | 1.30 |
Variable administrative expense | $ | 0.80 |
Required:
3. Assume the cost object is the companys various sales representatives. Furthermore, assume that the company spent $39,200 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 14,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 14,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
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