[The following information applies to the questions displayed below.] Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 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 $ 7.00 $ 4.00 $ 1.50 $5.00 $ 3.50 $ 2.50 $ 1.00 $ 0.50 Exercise 1-7 (Static) Direct and Indirect Costs [LO1-1] Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 20,000 units? b. What is the total indirect manufacturing cost incurred to make 20,000 units? 2. Assume the cost object is the Manufacturing Department and its total output is 20,000 units. a. How much total manufacturing cost is directly traceable to the Manufacturing Department? b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department? 3. Assume the cost object is the company's various sales representatives. Furthermore, assume the company spent $50,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives' compensation. a. When the company sells 20,000 units, what is the total direct selling expense readily traceable to individual sales representatives? b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
[The following information applies to the questions displayed below.] Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 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 $ 7.00 $ 4.00 $ 1.50 $5.00 $ 3.50 $ 2.50 $ 1.00 $ 0.50 Exercise 1-7 (Static) Direct and Indirect Costs [LO1-1] Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 20,000 units? b. What is the total indirect manufacturing cost incurred to make 20,000 units? 2. Assume the cost object is the Manufacturing Department and its total output is 20,000 units. a. How much total manufacturing cost is directly traceable to the Manufacturing Department? b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department? 3. Assume the cost object is the company's various sales representatives. Furthermore, assume the company spent $50,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives' compensation. a. When the company sells 20,000 units, what is the total direct selling expense readily traceable to individual sales representatives? b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
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
6
![[The following information applies to the questions displayed below.]
Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 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
Exercise 1-7 (Static) Direct and Indirect Costs [LO1-1]
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 20,000 units?
b. What is the total indirect manufacturing cost incurred to make 20,000 units?
2. Assume the cost object is the Manufacturing Department and its total output is 20,000 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
Average
Cost per
Unit
$7.00
$ 4.00
$ 1.50
3. Assume the cost object is the company's various sales representatives. Furthermore, assume the company spent $50,000 of its
total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the
company's sales representatives' compensation.
a. When the company sells 20,000 units, what is the total direct selling expense readily traceable to individual sales
representatives?
$5.00
$ 3.50
$ 2.50
$ 1.00
$ 0.50
b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales
representatives?
Required 1 Required 2 Required 3
Complete this question by entering your answers in the tabs below.
2a. Direct material cost per unit
2a. Direct labor cost per unit
2. Assume the cost object is the Manufacturing Department and its total output is 20,000 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
Note: Round per unit values to 2 decimal places.
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
Show less
2a. Variable manufacturing overhead per unit
2a. Fixed manufacturing overhead per unit
2a. Total manufacturing cost per unit
2a. Number of units produced and sold
2a. Total direct costs
2b. Total indirect costs
$
$
0.00
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F619c32f0-467f-44aa-b991-41b6e4e139a6%2F87018d93-b167-4ffd-93a7-81198d60fd37%2F6p4kjd7_processed.png&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 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
Exercise 1-7 (Static) Direct and Indirect Costs [LO1-1]
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 20,000 units?
b. What is the total indirect manufacturing cost incurred to make 20,000 units?
2. Assume the cost object is the Manufacturing Department and its total output is 20,000 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
Average
Cost per
Unit
$7.00
$ 4.00
$ 1.50
3. Assume the cost object is the company's various sales representatives. Furthermore, assume the company spent $50,000 of its
total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the
company's sales representatives' compensation.
a. When the company sells 20,000 units, what is the total direct selling expense readily traceable to individual sales
representatives?
$5.00
$ 3.50
$ 2.50
$ 1.00
$ 0.50
b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales
representatives?
Required 1 Required 2 Required 3
Complete this question by entering your answers in the tabs below.
2a. Direct material cost per unit
2a. Direct labor cost per unit
2. Assume the cost object is the Manufacturing Department and its total output is 20,000 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
Note: Round per unit values to 2 decimal places.
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
Show less
2a. Variable manufacturing overhead per unit
2a. Fixed manufacturing overhead per unit
2a. Total manufacturing cost per unit
2a. Number of units produced and sold
2a. Total direct costs
2b. Total indirect costs
$
$
0.00
0
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