Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4] Kubin Company’s relevant range of production is 22,000 to 27,000 units. When it produces and sells 24,500 units, its 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. For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,500 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 22,000 units?
Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4] Kubin Company’s relevant range of production is 22,000 to 27,000 units. When it produces and sells 24,500 units, its 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. For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,500 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 22,000 units?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4]
Kubin Company’s relevant range of production is 22,000 to 27,000 units. When it produces and sells 24,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 8.20 |
| Direct labor | $ | 5.20 |
| Variable manufacturing |
$ | 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. For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units?
2. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,500 units?
3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,000 units?
4. For financial accounting purposes, what is the total amount of period costs incurred to sell 22,000 units?
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VIEW1. Determine the total amount of product costs incurred to make 24,500 units
VIEW2. Determine the total amount of period costs incurred to sell 24,500 units.
VIEW3. Determine the total amount of product costs incurred to make 27,000 units.
VIEW4. Determine the total amount of period costs incurred to sell 22,000 units.
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