Question
The respective production range of Kubin Company is 22,000 to 27,000 units. When she produces and sells 24,500 units, her average costs per unit are
The respective production range of Kubin Company is 22,000 to 27,000 units. When she produces and sells 24,500 units, her average costs per unit are as follows: Average Cost Per Unit Direct materials $8.20 Direct labor $5.20 Variable manufacturing overhead $2.70 Fixed manufacturing overhead $6.20 Fixed selling expense $4.70 $ Fixed administrative expense $3.70 Sales commissions $2.20 Variable administrative expense $1.70
Required: 1. Suppose the cost object is production units: a. What is the total direct production cost incurred to make 24,500 units? B. What is the total indirect production cost incurred to make 24,500 units?
2. Suppose the cost object is Production Department and its total output is 24,500 units. A. How much of the total production cost can be traced directly to the Production Department? b. How much of the total production cost is an indirect cost that cannot be easily traced back to the Production Department?
3. Suppose the cost object is the company's various sales representatives. Also, let's assume that the company spends $90,650 of its total fixed sales expense on advertising, and the remainder of the total fixed sales expense is a fixed portion of the company's sales reps.
A. When the company sells 24,500 units, what is the total direct selling expense that can be traced back to individual sales representatives?
B. What is the total indirect selling expense that is not easily traceable to individual sales representatives when the company sells 24,500 units? Let's say the company spends $90,650 of its total fixed sales expense on advertising, and the remainder of the total fixed sales expense is a fixed portion of the company's sales reps.
A. When the company sells 24,500 units, what is the total direct selling expense that can be traced back to individual sales representatives?
B. What is the total indirect selling expense that is not easily traceable to individual sales representatives when the company sells 24,500 units? Let's say the company spends $90,650 of its total fixed sales expense on advertising, and the remainder of the total fixed sales expense is a fixed portion of the company's sales reps.
Required:
A. When the company sells 24,500 units, what is the total direct selling expense that can be traced back to individual sales representatives?
B. What is the total indirect selling expense that is not easily traceable to individual sales representatives when the company sells 24,500 units?
Step by Step Solution
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Step: 1
To calculate the total direct and indirect costs for the given scenarios well use the information provided 1 Cost Object Production Units a Total Direct Production Cost The direct production cost incl...Get Instant Access to Expert-Tailored Solutions
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