Question

Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells 27,500 units, its average costs per unit are as follows:

  

	Average Cost per Unit
Direct materials	$	8.40
Direct labor	$	5.40
Variable manufacturing overhead	$	2.90
Fixed manufacturing overhead	$	6.40
Fixed selling expense	$	4.90
Fixed administrative expense	$	3.90
Sales commissions	$	2.40
Variable administrative expense	$	1.90

Required:

1. For financial accounting purposes, what is the total amount of product costs incurred to make 27,500 units?

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 27,500 units?

3. For financial accounting purposes, what is the total amount of product costs incurred to make 31,000 units?

4. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,000 units?

(For all requirements, do not round intermediate calculations.)

Answer 1

1
Direct materials	231000	=27500*8.4
Direct labor	148500	=27500*5.4
Variable manufacturing overhead	79750	=27500*2.9
Fixed manufacturing overhead	176000	=27500*6.4
Total amount of product costs	635250
2
Fixed selling expense	134750	=27500*4.9
Fixed administrative expense	107250	=27500*3.9
Sales commissions	66000	=27500*2.4
Variable administrative expense	52250	=27500*1.9
Total amount of period costs	360250
3
Direct materials	260400	=31000*8.4
Direct labor	167400	=31000*5.4
Variable manufacturing overhead	89900	=31000*2.9
Fixed manufacturing overhead	176000	=27500*6.4
Total amount of product costs	693700
4
Fixed selling expense	134750	=27500*4.9
Fixed administrative expense	107250	=27500*3.9
Sales commissions	57600	=24000*2.4
Variable administrative expense	45600	=24000*1.9
Total amount of period costs	345200