The respective production range of Kubin Company is 25,000 to 33,500 units. The average costs per unit
Question:
The respective production range of Kubin Company is 25,000 to 33,500 units. The average costs per unit when it produces and sells 29,250 units are as below:
| Average Cost Per Unit | ||
| Direct materials | $ | 8.50 |
| direct labor | $ | 5.50 |
| Variable production load | $ | 3.00 |
| Fixed production load | $ | 6.50 |
| Fixed selling expense | $ | 5.00 |
| Fixed administrative expense | $ | 4.00 |
| Sales commissions | $ | 2.50 |
| Variable administrative expense | $ | 2.00 |
Necessary:
2. Suppose the cost object is Production Department and its total output is 29,250 units.
A. How much of the total production cost can be traced directly to the Production Department?
B. How much of the total production cost is an indirect cost that cannot be easily traced back to the Production Department?
2. Suppose the cost object is Production Department and its total output is 29,250 units.
A. How much of the total production cost can be traced directly to the Production Department? (Rounding values per unit to 2 decimal places.)
B. How much of the total production cost is an indirect cost that cannot be easily traced back to the Production Department?
3. Suppose the cost object is the company's various sales representatives. Also, let's assume that the company spends $117,000 of its total fixed sales expense on advertising, and the remainder of the total fixed sales expense is a fixed portion of the company's sales reps. A. When the company sells 29,250 units, what is the total direct selling expense that can be traced back to individual sales representatives? B. What is the total indirect selling expense that is not easily traceable to individual sales representatives when the company sells 29,250 units? 3. Suppose the cost object is the company's various sales representatives. Also, let's assume that the company spends $117,000 of its total fixed sales expense on advertising, and the remainder of the total fixed sales expense is a fixed portion of the company's sales reps. A. When the company sells 29,250 units, what is the total direct selling expense that can be traced back to individual sales representatives? B. What is the total indirect selling expense that is not easily traceable to individual sales representatives when the company sells 29,250 units? |
Expert Answer:
To calculate the total production cost and the direct and indirect costs associated with the Production Department and sales representatives we can us... View the full answer
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
