Kubin Company's relevant range of production is 16,000 to 24,500 units. When it produces and sells 20,250 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $ 7.70 $ 4.70 $2.20 $5.70 $ 4.20 $3.20 $ 1.70 $ 1.20 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 20,250 to 20,251 units? 2. What is the incremental cost incurred if the company increases production and sales from 20,250 to 20,251 units? 3. Assume that Kubin Company produced 20,250 units and expects to sell 19,980 of them. If a new customer unexpectedly emerges and expresses interest in buying the 270 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer? 4. Assume that Kubin Company produced 20,250 units and expects to sell 19,980 of them. If a new customer unexpectedly emerges and expresses interest in buying the 270 extra units that have been produced by the company and that would otherwise remain cold what incremental colling and administrative cost per unit is incurred to sell these units to the customer?
Kubin Company's relevant range of production is 16,000 to 24,500 units. When it produces and sells 20,250 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $ 7.70 $ 4.70 $2.20 $5.70 $ 4.20 $3.20 $ 1.70 $ 1.20 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 20,250 to 20,251 units? 2. What is the incremental cost incurred if the company increases production and sales from 20,250 to 20,251 units? 3. Assume that Kubin Company produced 20,250 units and expects to sell 19,980 of them. If a new customer unexpectedly emerges and expresses interest in buying the 270 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer? 4. Assume that Kubin Company produced 20,250 units and expects to sell 19,980 of them. If a new customer unexpectedly emerges and expresses interest in buying the 270 extra units that have been produced by the company and that would otherwise remain cold what incremental colling and administrative cost per unit is incurred to sell these units to the customer?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Transcribed Image Text:Kubin Company's relevant range of production is 16,000 to 24,500 units. When it produces and sells 20,250 units, its average costs
per unit are as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Fixed selling expense
Fixed administrative expense
Sales commissions
Variable administrative expense
Average Cost per
Unit
$ 7.70
$ 4.70
$ 2.20
$ 5.70
Required:
1. What is the incremental manufacturing cost incurred if the company increases production from 20,250 to 20,251 units?
2. What is the incremental cost incurred if the company increases production and sales from 20,250 to 20,251 units?
3. Assume that Kubin Company produced 20,250 units and expects to sell 19,980 of them. If a new customer unexpectedly emerges
and expresses interest in buying the 270 extra units that have been produced by the company and that would otherwise remain
unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer?
4. Assume that Kubin Company produced 20,250 units and expects to sell 19,980 of them. If a new customer unexpectedly emerges
and expresses interest in buying the 270 extra units that have been produced by the company and that would otherwise remain
unsold, what incremental selling and administrative cost per unit is incurred to sell these units to the customer?
Complete this question by entering your answers in the tabs below.
Direct materials
Direct labor
Variable manufacturing overhead
Total incremental cost
$4.20
$3.20
$ 1.70
$ 1.20
Required 1
Required 2 Required 3 Required 4
What is the incremental manufacturing cost incurred if the company increases production from 20,250 to 20,251 units?
(Round your answers to 2 decimal places.)
$
0.00
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