Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 5, Problem 14E
To determine
Explain the reasons why increase in unit cost occurred in the given condition.
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[The following information applies to the questions displayed below.]
Kubin Company's relevant range of production is 14,000 to 20,500 units. When it produces and sells 17,250 units, its
average costs per unit are as follows:
Average Cost per
Unit
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Fixed selling expense
Fixed administrative expense
7.50
4.50
2.00
5.50
4.00
3.00
Sales commissions
1.50
Variable administrative expense
1.00
Requlred:
1. If 14,000 units are produced and sold, what is the variable cost per unit produced and sold?
2. If 20,500 units are produced and sold, what is the varlable cost per unit produced and sold?
3. If 14,000 units are produced and sold, what is the total amount of varlable cost related to the units produced and sold?
4. If 20,500 units are produced and sold, what is the total amount of varlable cost related to the units produced and sold?
5. If 14,000 units are produced, what is the average fixed…
[The following information applies to the questions displayed below.]
Kubin Company's relevant range of production is 19,000 to 20,000 units. When it produces and sells 19,500 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
Average
Cost per
Unit
$7.90
$ 4.90
$2.40
$5.90
$4.40
$3.40
Required:
1. For financial accounting purposes, what is the total amount of product costs incurred to make 19,500 units?
2. For financial accounting purposes, what is the total amount of period costs incurred to sell 19,500 units?
3. For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units?
4. For financial accounting purposes, what is the total amount of period costs incurred to sell 19,000 units?
(For all requirements, do not round intermediate calculations.)
1.…
(The following information applies to the questions displayed below.)
Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 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
Average
Cost Per
Unit
$ 5.30
$ 2.80
$ 1.40
$4.00
$ 2.30
$2.20
$ 1.20
$ 0.45
2. For financial accounting purposes, what is the total amount of period costs igcurred to sell 10,000 units? (Do not round
intermediate calculations.)
Total period cost
Chapter 5 Solutions
Principles of Cost Accounting
Ch. 5 - What are the two basic systems of cost accounting,...Ch. 5 - Following is a list of manufactured products. For...Ch. 5 - Give three examples of industries and companies...Ch. 5 - What is the primary difference between the two...Ch. 5 - What is the difference between the term unit cost...Ch. 5 - How do the two cost accounting systems differ in...Ch. 5 - What is the primary objective in accumulating...Ch. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - What would be the effect on the unit cost of...
Ch. 5 - What information is reflected on a production...Ch. 5 - What are the four main sections of a cost of...Ch. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - In determining the costs transferred to a third...Ch. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Compute the equivalent production (unit output)...Ch. 5 - During the month, a company with no...Ch. 5 - Comacho Chemical Co. recorded costs for the month...Ch. 5 - Norwood Co. had 200 units in work in process at...Ch. 5 - Using the following data, determine which figures...Ch. 5 - The records of Burris Inc. reflect the following...Ch. 5 - The records of Stone Inc. reflect the following...Ch. 5 - Argo Manufacturing Co. had 500 units, three-fifths...Ch. 5 - AAA Appliances Inc. has two production...Ch. 5 - AAA Appliances Inc. has two production...Ch. 5 - Prob. 11ECh. 5 - Prob. 12ECh. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Chavez Concrete Inc. has two production...Ch. 5 - Chavez Concrete Inc. has two production...Ch. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - Geneva Products Co. produces a latex paint and...Ch. 5 - Dublin Brewing Co. uses the process cost system....Ch. 5 - Kokomo Kayak Inc. uses the process cost system....Ch. 5 - Prob. 4PCh. 5 - Sifting, the second department in a...Ch. 5 - Forming, the second department in a...Ch. 5 - Premier Products Inc. has three departments and...Ch. 5 - Premier Products Inc. has three departments and...Ch. 5 - Aero Aluminum Inc. uses a process cost system. The...Ch. 5 - Aero Aluminum Inc. uses a process cost system. The...Ch. 5 - Prob. 11PCh. 5 - Petrini Products Co. has two departments: Mixing...Ch. 5 - Tanaka Manufacturing Co. uses the process cost...Ch. 5 - Syracuse Beverages Inc. has three plants that make...
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- [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 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 Average Cost Per Unit $ 5.10 $ 2.60 $ 1.60 $4.00 $ 2.10 $ 2.10 $ 1.10 $ 0.55 11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis? Note: Round your "per unit" answer to 2 decimal places. Total manufacturing overhead cost Manufacturing overhead per unitarrow_forward[The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 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 Average Cost Per Unit $6.20 $ 3.70 $ 1.60 $ 4.00 $ 3.20 $2.20 $ 1.20 $ 0.45 12. If 12,500 units are produced, what is the total manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per-unit basis? Note: Round your "per unit" answer to 2 decimal places. Total manufacturing overhead cost Manufacturing overhead per unitarrow_forward[The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 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 Average Cost per Unit $ 6.50 $ 4.00 $ 1.60 $ 4.00 $ 3.50 $ 2.20 $ 1.20 $ 0.45 8. If 12,500 units are produced, what is the average fixed manufacturing cost per unit produced? (Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. $ 0.00 X Average fixed manufacturing cost per unitarrow_forward
- The following information is available from the accounting records of EVA Corporation:Fixed cost per period is $4800. Sales volume for the last period was $19 360, and variable cost was $13 552. Capacity per period is a sales volume of $32 000.Draw a detailed break-even chart on a grid such as the one provided. Marks are awarded for determining the revenue and cost functions, correctness of plotted points and lines, correct labeling of axes, and overall neatness of the graph.arrow_forwardGlisan Corporation's relevant range of activity is 4,300 units to 8,300 units. When it produces and sells 6,300 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 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 6,300 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 6,300 units? c. If 5,300 units are sold, what is the total amount of variable costs related to the units sold? d. If the selling price is $24.35 per unit, what is the contribution margin per unit sold? Note: Round "Per unit" answer to 2 decimal places. e. What incremental manufacturing cost will the company incur if it increases production from 6,300 to 6,301 units? Note: Round "Per unit" answer to 2 decimal places. a. Total…arrow_forwardLock Company has two producing and two service departments labeled P1, P2, S1 and S2, respectively. Direct costs for each department and the proportion of service costs used by the various departments are as follows: (P1, $300,000); (P2, $200,000); (S1, $100,000; S2-25%, P1-50%, P2-25%); (S2, $40,000; S1-10%, P1-50%, P2-40%). What is the total cost of P1 if the costs of service departments are allocated using the direct method? $388,889 $386,111 $386,666 $370,000 P377,778arrow_forward
- The following example illustrates how traditional cost accounting techniques could result in a misleading and inequitable division of costs between low-volume and high-volume products, and demonstrates that ABC may provide a more meaningful allocation of costs. Suppose that Cooplan manufactures four products, W, X, Y and Z. The direct labour cost per hour is $5. Other output and cost data for the period just ended are as follows. Number of production runs in the period Material cost Direct labour Machine per unit $4 Output units hours per unit hours per unit W 10 2 20 1 1 10 2 80 3 Y 100 5 20 1 1 100 5 80 3 14 Overhead costs 24 Expediting and scheduling costs Materials handling costs 9,100 7,700 Short-run variable costs 3,080 10,920 Set-up costs Required Prepare unit costs for each product using traditional costing and ABC.arrow_forwardHow do i calculate this? Perteet Corporation's relevant range of activity is 8,400 units to 16,000 units. When it produces and sells 12,200 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $7.80 Direct labor $4.00 Variable manufacturing overhead $1.80 Fixed manufacturing overhead $3.60 Fixed selling expense $0.70 Fixed administrative expense $0.40 Sales commissions $0.50 Variable administrative expense $0.55 If 9,800 units are produced, the total amount of manufacturing overhead cost is closest to:arrow_forwardScottsdale Manufacturing is organized into two divisions: Fabrication and Assembly. Components transferred between the two divisions are recorded at a predetermined transfer price. Standard variable manufacturing cost per unit in the Fabrication Division is $350. At the present time, this division is working to capacity. Fabrication estimates that the units it produces could be sold on the external market for $580. The product under consideration is viewed as a commodity-type product, with no differentiating features or characteristics. Required: 2. Based on the general transfer pricing rule presented in the chapter, what is the minimum transfer price between units when the Fabrication Division is working to capacity? 3. What if the Fabrication Division had excess capacity? How would this change the minimum transfer price as determined by the application of the general transfer pricing rule?arrow_forward
- Use this information for Square Yard Products Inc. to answer the question that follow.Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5.00 per unit. However, the same materials are available with Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3.00 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales.How much will Division 3's income from operations increase?arrow_forward[The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Amount Per Variable cost per unit sold Unit $5.50 $3.00 $1.50 $3.50 $2.50 $2.00 $1.00 $0.50 3. If 8,000 units are sold, what is the variable cost per unit sold? (Round your answer to 2 decimal places.)arrow_forwardRequired information. [The following information applies to the questions displayed below.) Kubin Company's relevant range of production is 27,000 to 29,000 units. When it produces and sells 28,000 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 Average Cost per Unit $8,70 $5.70 $3.20 $6.70 $5.20 $.4.20 $2.70 $.2.20 Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 28,000 units? b. What is the total indirect manufacturing cost incurred to make 28.000 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 28.000 units. Nextarrow_forward
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