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Vhat is the incremental manufacturing cost incurred if the company increases production from 12,500 to 12,501 units? Round your answers to 2 decimal places.)

Vhat is the incremental manufacturing cost incurred if the company increases production from 12,500 to 12,501 units? Round your answers to 2 decimal places.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the incremental manufacturing cost incurred if the company increases production from 12,500 to 12,501 units? (Round your answers to 2 decimal places.) Direct materials Direct labor Variable manufacturing overhead Total incremental cost $ 0.00 Required 1 Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the incremental manufacturing cost incurred if the company increases production from 12,500 to 12,501 units? (Round your answers to 2 decimal places.) Direct materials Direct labor Variable manufacturing overhead Total incremental cost $ 0.00 Required 1 Required 2 >
Kubin Company's relevant range of production is 11,000 to 14,000'units. When it produces and sells 12,500 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 $ 7.20 $ 4.20 $ 1.70 $ 5.20 $ 3.70 $ 2.70 $ 1.20 $ 0.70 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 12,500 to 12,501 units? 2. What is the incremental cost incurred if the company increases production and sales from 12,500 to 12,501 units? 3. Assume that Kubin Company produced 12,500 units and expects to sell 12,280 of them. If a new customer unexpectedly emerges and expresses interest in buying the 220 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 12,500 units and expects to sell 12,280 of them. If a new customer unexpectedly emerges and expresses interest in buying the 220 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:Kubin Company's relevant range of production is 11,000 to 14,000'units. When it produces and sells 12,500 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 $ 7.20 $ 4.20 $ 1.70 $ 5.20 $ 3.70 $ 2.70 $ 1.20 $ 0.70 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 12,500 to 12,501 units? 2. What is the incremental cost incurred if the company increases production and sales from 12,500 to 12,501 units? 3. Assume that Kubin Company produced 12,500 units and expects to sell 12,280 of them. If a new customer unexpectedly emerges and expresses interest in buying the 220 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 12,500 units and expects to sell 12,280 of them. If a new customer unexpectedly emerges and expresses interest in buying the 220 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
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Incremental manufacturing cost is the increase in cost by producing more units. It is that Variable cost which is incurred in manufacturing the product. Fixed cost remains unchanged and would not be considered.

Currently company is producing 12,500 units. The change in cost on production of 12,501 units is called as incremental manufacturing cost per unit.

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