Required information [The following information applies to the questions displayed below.] Kubin Company's relevant range of production is 10,000 to 12,000 units. When it produces and sells 11,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.10 Direct labor $ 4.10 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 5.10 Fixed selling expense $ 3.60 Fixed administrative expense $ 2.60 Sales commissions $ 1.10 Variable administrative expense $ 0.60 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 11,000 to 11,001 units? 2. What is the incremental cost incurred if the company increases production and sales from 11,000 to 11,001 units? 3. Assume that Kubin Company produced 11,000 units and expects to sell 10,790 of them. If a new customer unexpectedly emerges and expresses interest in buying the 210 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 11,000 units and expects to sell 10,790 of them. If a new customer unexpectedly emerges and expresses interest in buying the 210 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?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
icon
Related questions
Question
Required information
[The following information applies to the questions displayed below.]
Kubin Company's relevant range of production is 10,000 to 12,000 units. When it produces and sells 11,000 units, its
average costs per unit are as follows:
Average
Cost per
Unit
Direct materials
$ 7.10
Direct labor
$ 4.10
Variable manufacturing overhead
$ 1.60
Fixed manufacturing overhead
$ 5.10
Fixed selling expense
$ 3.60
Fixed administrative expense
$ 2.60
Sales commissions
$ 1.10
Variable administrative expense
$ 0.60
Required:
1. What is the incremental manufacturing cost incurred if the company increases production from 11,000 to 11,001 units?
2. What is the incremental cost incurred if the company increases production and sales from 11,000 to 11,001 units?
3. Assume that Kubin Company produced 11,000 units and expects to sell 10,790 of them. If a new customer unexpectedly emerges
and expresses interest in buying the 210 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 11,000 units and expects to sell 10,790 of them. If a new customer unexpectedly emerges
and expresses interest in buying the 210 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?
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Kubin Company's relevant range of production is 10,000 to 12,000 units. When it produces and sells 11,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.10 Direct labor $ 4.10 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 5.10 Fixed selling expense $ 3.60 Fixed administrative expense $ 2.60 Sales commissions $ 1.10 Variable administrative expense $ 0.60 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 11,000 to 11,001 units? 2. What is the incremental cost incurred if the company increases production and sales from 11,000 to 11,001 units? 3. Assume that Kubin Company produced 11,000 units and expects to sell 10,790 of them. If a new customer unexpectedly emerges and expresses interest in buying the 210 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 11,000 units and expects to sell 10,790 of them. If a new customer unexpectedly emerges and expresses interest in buying the 210 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?
Expert Solution
steps

Step by step

Solved in 2 steps with 5 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Essentials of Business Analytics (MindTap Course …
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning