- The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs the company incurs.
Required:
For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost.
- Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $800 and the variable cost per cup of coffee served is $0.55.
Required:
- Fill in the following table with your estimates of the company’s total cost and average cost per cup of coffee at the indicated levels of activity.
- Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases?
- Cherokee Incorporated is a merchandiser that provided the following information:
| Amount | |
| Number of units sold | 11,000 |
| Selling price per unit | $ 16 |
| Variable selling expense per unit | $ 1 |
| Variable administrative expense per unit | $ 3 |
| Total fixed selling expense | $ 19,000 |
| Total fixed administrative expense | $ 15,000 |
| Beginning merchandise inventory | $ 10,000 |
| Ending merchandise inventory | $ 24,000 |
| Merchandise purchases | $ 87,000 |
Required:
- Prepare a traditional income statement.
4. Required information
Skip to question
[The following information applies to the questions displayed below.]
Kubin Company’s relevant range of production is 15,000 to 19,000 units. When it produces and sells 17,000 units, its average costs per unit are as follows:
| Average Cost per Unit | |
| Direct materials | $ 7.60 |
| Direct labor | $ 4.60 |
| Variable manufacturing overhead | $ 2.10 |
| Fixed manufacturing overhead | $ 5.60 |
| Fixed selling expense | $ 4.10 |
| Fixed administrative expense | $ 3.10 |
| Sales commissions | $ 1.60 |
| Variable administrative expense | $ 1.10 |
Required:
- For financial accounting purposes, what is the total product cost incurred to make 17,000 units?
- For financial accounting purposes, what is the total period cost incurred to sell 17,000 units?
- For financial accounting purposes, what is the total product cost incurred to make 19,000 units?
- For financial accounting purposes, what is the total period cost incurred to sell 15,000 units?