Kubin Company’s relevant range of production is 30,000 to 35,000units. When it produces and sells 32,500 units, its average costsper unit are as follows:
| Average Cost per Unit |
| Directmaterials | $ | 9.00 |
| Directlabor | $ | 6.00 |
| Variablemanufacturing overhead | $ | 3.50 |
| Fixedmanufacturing overhead | $ | 7.00 |
| Fixed sellingexpense | $ | 5.50 |
| Fixedadministrative expense | $ | 4.50 |
| Salescommissions | $ | 3.00 |
| Variableadministrative expense | $ | 2.50 |
|
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make32,500 units?
b. What is the total indirect manufacturing cost incurred tomake 32,500 units?
2. Assume the cost object is the Manufacturing Department andthat its total output is 32,500 units.
a. How much total manufacturing cost is directly traceable tothe Manufacturing Department?
b. How much total manufacturing cost is an indirect cost thatcannot be easily traced to the Manufacturing Department?
3. Assume the cost object is the company’s various salesrepresentatives. Furthermore, assume that the company spent$146,250 of its total fixed selling expense on advertising and theremainder of the total fixed selling expense comprised the fixedportion of the company's sales representatives’ compensation.
a. When the company sells 32,500 units, what is the total directselling expense that can be readily traced to individual salesrepresentatives?
b. When the company sells 32,500 units, what is the totalindirect selling expense that cannot be readily traced toindividual sales representatives?
