Set 1 Help Save Exercise 19 Fixed Variable and Mixed Costs L

Set 1 Help Save Exercise 1-9 Fixed, Variable, and Mixed Costs [LO1-4) Kubin Company\'s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, ts average costs per unit are as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Amount per Unit $ 7.00 4.80 1.50 5.00 $ 3.50 2.50 1.00 $ 0.50 Required: 1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 22.000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 18,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 4. If 22,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 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 Round per unit values to 2 decimal places.) Prex 6of 7 ll Next > 1

Solution

1)

2)Variable cost of unit produced and sold : $ 14 PER UNIT

3)Total variable cost of unit produced and sold : 14*18000 = $ 252000

4)Total variable cost of unit produced and sold : 14 *22000 = $ 308,000

5)Total fixed manufacturing overhead : 5*20000 = 100,000

If 18000 units are produced ,Fixed manufacturing overhead per unit : 100000/18000 = $ 5.56

6)If 22000 units are produced ,Fixed manufacturing overhead per unit : 100000/22000 = $ 4.55

7)Fixed overhead remain constant within relevant range of production .Fixed overhead : $ 100000

8)Fixed overhead :$ 100000

Direct material	7
Direct labor	4
Variable overhead	1.5
Variable cost of unit produced	12.5
Sales commission	1
variable administrative	.50
Variable cost of unit produced and sold	14