80.2K

Verified Solution

Link Copied!

Kubin Companys relevant range of production is 25,000 to 33,500 units. When it produces and sells 29,250 units, its average costs per unit are as follows: Amount per Unit Direct materials $ 8.50 Direct labor $ 5.50 Variable manufacturing overhead $ 3.00 Fixed manufacturing overhead $ 6.50 Fixed selling expense $ 5.00 Fixed administrative expense $ 4.00 Sales commissions $ 2.50 Variable administrative expense $ 2.00 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 29,250 to 29,251 units? 2. What is the incremental cost incurred if the company increases production and sales from 29,250 to 29,251 units? 3. Assume that Kubin Company produced 29,250 units and expects to sell 28,900 of them. If a new customer unexpectedly emerges and expresses interest in buying the 350 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer? 4. Assume that Kubin Company produced 29,250 units and expects to sell 28,900 of them. If a new customer unexpectedly emerges and expresses interest in buying the 350 extra units that have been produced by the company and that would otherwise remain unsold, what incremental selling and administrative cost per unit is incurred to sell these units to the customer?

Kubin Company's relevant range of production is 25,000 to 33,500 units. When it produces and sells 29,250 units, its 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 $ 8.50 $ 5.50 $ 3.00 $ 6.50 $ 5.00 $ 4.00 $ 2.50 $ 2.00 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 29,250 to 29,251 units? 2. What is the incremental cost incurred if the company increases production and sales from 29,250 to 29,251 units? 3. Assume that Kubin Company produced 29,250 units and expects to sell 28,900 of them. If a new customer unexpectedly emerges and expresses interest in buying the 350 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer? 4. Assume that Kubin Company produced 29,250 units and expects to sell 28,900 of them. If a new customer unexpectedly emerges and expresses interest in buying the 350 extra units that have been produced by the company and that would otherwise remain unsold, what incremental selling and administrative cost per unit is incurred to sell these units to the customer? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the incremental manufacturing cost incurred if the company increases production from 29,250 to 29,251 units? (Round your answers to 2 decimal places.)

Answer & Explanation Solved by verified expert

See Answer