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Question - Kubin Company's relevant range of production is 23,000 to 27,500 units. When it produces and sells 25,250 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials
$ 8.30
Direct labor
$ 5.30
Variable manufacturing overhead
$ 2.80
Fixed manufacturing overhead
$ 6.30
Fixed selling expense
$ 4.80
Fixed administrative expense
$ 3.80
Sales commissions
$ 2.30
Variable administrative expense
$ 1.80
Required: 1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 25,250 units?
b. What is the total indirect manufacturing cost incurred to make 25,250 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
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