Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kubin Companys relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as

Kubin Companys relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as follows:

Amount per Unit
Direct materials $ 9.00
Direct labor $ 6.00
Variable manufacturing overhead $ 3.50
Fixed manufacturing overhead $ 7.00
Fixed selling expense $ 5.50
Fixed administrative expense $ 4.50
Sales commissions $ 3.00
Variable administrative expense $ 2.50

Required:

1. What is the incremental manufacturing cost incurred if the company increases production from 32,500 to 32,501 units?

2. What is the incremental cost incurred if the company increases production and sales from 32,500 to 32,501 units?

3. Assume that Kubin Company produced 32,500 units and expects to sell 32,100 of them. If a new customer unexpectedly emerges and expresses interest in buying the 400 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 32,500 units and expects to sell 32,100 of them. If a new customer unexpectedly emerges and expresses interest in buying the 400 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?

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

What is the incremental manufacturing cost incurred if the company increases production from 32,500 to 32,501 units? (Round your answers to 2 decimal places.) Direct materials Direct labor Variable manufacturing overhead Total incremental cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Next Step Advanced Medical Coding And Auditing

Authors: Carol J. Buck

1st Edition

0323430775, 978-0323430777

More Books

Students also viewed these Accounting questions