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:
Average Cost per Unit
Direct materials: $7.20
Direct labor: $4.20
Variable manufacturing overhead: $1.70
Fixed manufacturing overhead: $5.20
Fixed selling expense: $3.70
Fixed administrative expense: $2.70
Sales commissions: $1.20
Variable administrative expense: $0.70
Required:
1. What is the total direct manufacturing cost incurred to make 12,500 units?
2. What is the total indirect manufacturing cost incurred to make 12,500 units?
Assume the cost object is the Manufacturing department and its total output is 12,500 units. How much manufacturing cost is directly traceable to the Manufacturing department? And how much manufacturing cost is indirectly traceable to the Manufacturing department?
Assume the cost object is the company's various sales. Assume the company spent $33,750 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. When the company sells 12,500 units, what is the total direct selling expense that can be traced to individual sales? When the company sells 12,500 units, what is the total indirect selling expense that can be traced to individual sales?
