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Len [333]
3 years ago
11

Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells 27,500 units, its average cos

ts per unit are as follows:

Business
1 answer:
zvonat [6]3 years ago
4 0

Answer:

  1. total product costs incurred to make 27,500 units = $25.10 x 27,500 = $690,250
  2. total period costs incurred to make 27,500 units = $15.10 x 27,500 = $415,250
  3. total product costs incurred to make 31,000 units = $25.10 x 31,000 = $778,100
  4. total period costs incurred to make 24,000 units = $15.10 x 24,000 = $362,400

Explanation:

                                                       Average Cost per Unit

  • Direct materials                                   $8.90
  • Direct labor                                           $5.90
  • Variable manufacturing overhead   $3.40
  • Fixed manufacturing overhead           $6.90
  • Fixed selling expense                           $5.40
  • Fixed administrative expense           $4.40
  • Sales commissions                           $2.90
  • Variable administrative expense           $2.40

Product costs include direct labor, direct materials, production supplies, and factory overhead. Product costs per unit = $8.90 + $5.90 + $3.40 + $6.90 = $25.10

Period costs include selling and administrative expenses. Period costs per unit = $5.40 + $4.40 + $2.90 + $2.40 = $15.10

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