Kubin Company’s relevant range of production is 22,000 to 27,000units. When it produces and sells 24,500 units, its average costsper unit are as follows:
| Amount 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. What is the incremental manufacturing cost incurred if thecompany increases production from 24,500 to 24,501 units?
2. What is the incremental cost incurred if the companyincreases production and sales from 24,500 to 24,501units?
3. Assume that Kubin Company produced 24,500 units and expectsto sell 24,180 of them. If a new customer unexpectedly emerges andexpresses interest in buying the 320 extra units that have beenproduced by the company and that would otherwise remain unsold,what is the incremental manufacturing cost per unit incurred tosell these units to the customer?
4. Assume that Kubin Company produced 24,500 units and expectsto sell 24,180 of them. If a new customer unexpectedly emerges andexpresses interest in buying the 320 extra units that have beenproduced by the company and that would otherwise remain unsold,what incremental selling and administrative cost per unit isincurred to sell these units to the customer?
