Kubin company's relevant range of production is 18,000 to 22,000 units. when it produces and sells 20,000 units, its average costs per unit are as follows: average cost per unit direct materials $ 7.00 direct labor $ 4.00 variable manufacturing overhead $ 1.50 fixed manufacturing overhead $ 5.00 fixed selling expense $ 3.50 fixed administrative expense $ 2.50 sales commissions $ 1.00 variable administrative expense $ 0.50 required: 1. for financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? 2. for financial accounting purposes, what is the total amount of period costs incurred to sell 20,000 units? 3. for financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units? 4. for financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units?

Production costs are costs that are directly related to the production process. These costs include labor costs, raw material costs, and overhead costs.

While period costs are costs incurred for the company's operations such as administrative costs, selling/sales costs

1. The product cost for producing 20,000 units is

Existing production costs for each unit:

$ 7.00 direct labor $ 4.00 manufacturing variable overhead $ 1.50 fixed manufacturing overhead $ 5.00

total product cost / unit = $ 7.00 + $ 4.00+ $ 1.50 + $ 5.00 = $ 17.5

So that for 20,000 units it becomes: 20,000 x $ 17.5 = $ 350,000

2. The cost period for producing 20,000 units is

Cost period for each unit:

fixed selling expense $ 3.50 fixed administrative expense $ 2.50 sales commissions $ 1.00 administrative expense variable $ 0.50

total period cost / unit = $ 3.5 + $ 2.5+ $ 1.00 + $ 0.5 = $ 7.5

So that for 20,000 units it becomes: 20,000 x $ 7.5 = $ 150,000

3. The product cost for producing 22,000 units is

Existing production costs for each unit: = $ 17.5

So that for 20,000 units it becomes: 22,000 x $ 17.5 = $ 385,000

4. The cost period for producing 18,000 units is

total period cost / unit = $ 7.5

So for 18,000 units it becomes: 18,000 x $ 7.5 = $ 135,000

Learn more

the cost of manufacturing product

https://brainly.com/question/10570313

an example of a fixed cost

https://brainly.com/question/3636923

The cost of materials

https://brainly.com/question/4783765

average costs per unit

https://brainly.com/question/4974216

Keywords: period cost, product cost

avantikar avantikar · Answer 2 · 2020-01-02T12:36:56+01:00

The product cost is $350,000 when the units produced are 20,000.
The period cost is $150,000 when the units produced are 20,000.
The product cost is $385,000 when the units produced are 22,000.
The period cost is $135,000 when the units produced are 18,000.

Further Explanation:

Product cost: product cost is the type of cost which is related to the product. If the production is stopped, the cost will not be incurred. All the variable costs and the fixed manufacturing cost are included in the product cost.

Period cost: period cost is the type of cost which is related to the period only. Whether the product is produced or not, the cost will be incurred. It does not depend on the production of the product. All the fixed costs are included in the period cost.

Given information:

The average cost per unit Direct materials $ 7.00
Direct labor $ 4.00
Variable manufacturing overhead $ 1.50
Fixed manufacturing overhead $ 5.00
Fixed selling expense $ 3.50
Fixed administrative expense $ 2.50
Sales commissions $ 1.00
Variable administrative expense $ 0.50

Compute the product cost when the units produced are 20,000.

Product cost = Number of units produced × (Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead)

= 20,000 × ($7+$4+$1.50+$5)

= $350,000

Compute the period cost when the units produced are 20,000.

Period cost = Number of units produced × (Fixed selling expense + Fixed administrative expense + Sales commissions + Variable administrative expense)

= 20,000 × ($3.50+$2.50+$1+$0.50)

= 150,000

Compute the product cost when the units produced are 22,000.

Product cost = Number of units produced × (Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead)

= 22,000 × ($7+$4+$1.50+$5)

= $385,000

Compute the period cost when the units produced are 18,000.

Period cost = Number of units produced × (Fixed selling expense + Fixed administrative expense + Sales commissions + Variable administrative expense)

= 18,000 × ($3.50+$2.50+$1+$0.50)

= 135,000

Learn more:

1. Learn more about variable costing

https://brainly.com/question/9203162

2. Learn more about variable and fixed expenses

https://brainly.com/question/7854996

3. Learn more about the total cost

https://brainly.com/question/5949032

Answer details:

Grade: Middle School

Subject: Cost accounting

Chapter: Types of cost

Keywords:

Kubincompany, product cost, period cost, production, units, selling expense, administrative expenses, the variable cost, manufacturing cost.