Kubin Company’s relevant range of production is 18,000 to
22,000 units. When it produces and sells 20,000 units, its average
costs per unit are as follows:
Amount per Unit
Direct materials $ 7.00
Direct labor $ 4.00
Variable manufacturing overhead $ 1.50
Fixed manufacturing overhead $ 5.00
Fixed selling expense $ 3.50
Fixed administrative expense $ 2.50
Sales commissions $ 1.00
Variable administrative expense $ 0.50
Required:
5. If 18,000 units are produced, what is the average fixed
manufacturing cost per unit produced?
6. If 22,000 units are produced, what is the average fixed
manufacturing cost per unit produced?
7. If 18,000 units are produced, what is the total amount of
fixed manufacturing overhead incurred to support this level of
production?
8. If 22,000 units are produced, what is the total amount of
fixed manufacturing overhead incurred to support this level of
production?