Problem 3

Kubin Companys relevant range of production is 25,000 to 33,500 units. When it produces and sells 29,250 units, its average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$ 8.50
Direct labor	$ 5.50
Variable manufacturing overhead	$ 3.00
Fixed manufacturing overhead	$ 6.50
Fixed selling expense	$ 5.00
Fixed administrative expense	$ 4.00
Sales commissions	$ 2.50
Variable administrative expense	$ 2.00

Required:

1. If 25,000 units are produced and sold, what is the variable cost per unit produced and sold?

2. If 33,500 units are produced and sold, what is the variable cost per unit produced and sold?

3. If 25,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

4. If 33,500 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?

5. If 25,000 units are produced, what is the average fixed manufacturing cost per unit produced?

6. If 33,500 units are produced, what is the average fixed manufacturing cost per unit produced?

7. If 25,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

8. If 33,500 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?