PlKubin Companys relevant range of production is 12000 to 16

PlKubin Company’s relevant range of production is 12,000 to 16,000 units. When it produces and sells 14,000 units, its average costs per unit are as follows:

  

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $39,200 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.

a. When the company sells 14,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives? (Round per unit value to 2 decimal places.)

b. When the company sells 14,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

	Average Cost per Unit
Direct materials	$	7.30
Direct labor	$	4.30
Variable manufacturing overhead	$	1.80
Fixed manufacturing overhead	$	5.30
Fixed selling expense	$	3.80
Fixed administrative expense	$	2.80
Sales commissions	$	1.30
Variable administrative expense	$	0.80

Solution

3a Sales Commission per unit $1.30 Number of units sold 14000 Total Sales Commission $18,200 Fixed portion of sales representatives’ compensation {[$3.80*14000 units]-$39200} $14,000 Total Direct Selling Expenses $32,200 3b The total Indirect Selling Expenses $39,200