Explanation TheManufacturing Department can directly tracemanufacturing costssuch as direct materials, direct labor andfactory overhead . The costs incurred for other than manufacturing processes are more difficult to assign to suchgoods and, therefore,are considered to beindirect manufacturing costs which cannot be easily traced respectively. Fixed overhead or expense is a lump-sum cost for a period which cannot be directly assigned to goods on per unit basis. However, the given information provides for per unit cost of such fixed overhead or expense at the level of activity of 20,000 units. The solution required is also for production and sales of 20,000 units and, therefore, we can use the per unit rates as given for such fixed overhead or expense respectively. Calculation: Statement showing total traceable and untraceable manufacturing cost: Particulars Amount ($) Kubin Company produces and sells 20,000 units: Total Directly Traceable Manufacturing Cost: Direct materials ($7 per unit * 20,000 units) 140,000 Direct labor ($4 per unit * 20,000 units) 80,000 Variable manufacturing overhead ($1... To determine To calculate the total traceable and untraceableselling expense to individual sales representatives incurred by Kubin Company to sell 20,000 units. To determine To determine the nature of administrative expenses in internal management reports.

17th Edition

ISBN: 9781260247787

Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

Publisher: RENT MCG

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Question

Chapter 1, Problem 7E

To determine

the total manufacturing cost which is directly traceable or cannot be easily traced by the Manufacturing Department of Kubin Company.

To determine

To calculate the total traceable and untraceableselling expense to individual sales representatives incurred by Kubin Company to sell 20,000 units.

To determine

To determine the nature of administrative expenses in internal management reports.

Expert Solution & Answer

Chapter 1 Solutions

Managerial Accounting

Ch. 1 - Prob. 1Q Ch. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5Q Ch. 1 - Define the following terms: (a) cost behavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Prob. 8Q Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...

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