Answer:
Kubin Company
1. Total amount of product costs incurred to make 32,500 units:
= $846,250
2. The total amount of period costs incurred to sell 32,500 units:
= $290,000
3. The total amount of products costs incurred to make 35,000 units:
= $892,500
4. The total amount of period costs incurred to sell 30,000 units:
= $282,500
Explanation:
a) Data and Calculations:
Relevant production range = 30,000 to 35,000 units
Actual production and sales = 32,500 units
Average Costs per Unit:
Direct materials $ 9.00
Direct labor $ 6.00
Variable manufacturing overhead $ 3.50
Fixed manufacturing overhead $ 7.00 $25.50
Fixed selling expense $ 5.50
Fixed administrative expense $ 4.50
Sales commissions $ 3.00
Variable administrative expense $ 2.50
1. Total amount of product costs incurred to make 32,500 units:
Direct materials $ 9.00
Direct labor $ 6.00
Variable manufacturing overhead $ 3.50
Fixed manufacturing overhead $ 7.00
Total product cost per unit $25.50
Total product costs:
Variable costs = $601,250 ($18.50 * 32,500)
Fixed costs = 245,000 ($7.00 * 35,000)
Total product = $846,250
2. The total amount of period costs incurred to sell 32,500 units:
Fixed selling expense $ 5.50 * 35,000 = $192,500
Sales commissions $ 3.00 * 32,500 = 97,500
Total period costs = $290,000
3. The total amount of products costs incurred to make 35,000 units:
= $892,500 (35,000 * $25.50)
4. The total amount of period costs incurred to sell 30,000 units:
Fixed selling expense $ 5.50 * 35,000 = $192,500
Sales commissions $ 3.00 * 30,000 = 90,000
Total period costs = $282,500
