Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4]Kubin Company’s relevant range of production is 22,000 to 27,000 units. When it produces and sells 24,500 units, its average costs per unit are as follows: Average Cost per UnitDirect materials$8.20Direct labor$5.20Variable manufacturing overhead$2.70Fixed manufacturing overhead$6.20Fixed selling expense$4.70Fixed administrative expense$3.70Sales commissions$2.20Variable administrative expense$1.70 Required:1. For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units?2. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,500 units?3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,000 units?4. For financial accounting purposes, what is the total amount of period costs incurred to sell 22,000 units?

Product Costs : Product costs are the costs that are incurred for the production of a particular…

Answered: Exercise 1-8 Product Costs and Period…

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Chapter21: Cost Behavior And Cost-volume-profit Analysis

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Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4]

Kubin Company’s relevant range of production is 22,000 to 27,000 units. When it produces and sells 24,500 units, its average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$	8.20
Direct labor	$	5.20
Variable manufacturing overhead	$	2.70
Fixed manufacturing overhead	$	6.20
Fixed selling expense	$	4.70
Fixed administrative expense	$	3.70
Sales commissions	$	2.20
Variable administrative expense	$	1.70

Required:

1. For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units?

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,500 units?

3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,000 units?

4. For financial accounting purposes, what is the total amount of period costs incurred to sell 22,000 units?

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