Kubin Company's relevant range of production is 10,000 to 12,000 units. When it produces and sells...
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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: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Average Cost per Unit $ 7.10 $ 4.10 $ 1.60 $ 5.10 $ 3.60 Fixed administrative expense $ 2.60 Sales commissions $ 1.10 Variable administrative expense $ 0.60 Exercise 1-10 (Algo) Differential Costs and Sunk Costs [LO1-5] 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? 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: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Average Cost per Unit $ 7.10 $ 4.10 $ 1.60 $ 5.10 $ 3.60 Fixed administrative expense $ 2.60 Sales commissions $ 1.10 Variable administrative expense $ 0.60 Exercise 1-10 (Algo) Differential Costs and Sunk Costs [LO1-5] 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?
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1 To calculate the incremental manufacturing cost incurred if the company increases production from 11000 to 11001 units we need to consider the addit... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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