
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

$ 8.20

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:** If 27,000 units are produced, what is the total fixed manufacturing overhead incurred to support this level of production?

**Note: Round per unit values to 2 decimal places.**




The total fixed manufacturing overhead does not change with the level of production within the relevant range, as fixed costs remain constant regardless of the number of units produced. 

Given that the relevant range of production for Kubin Company is 22,000 to 27,000 units, the fixed manufacturing overhead incurred will be the same at any production level within this range. 

We know that the average fixed manufacturing overhead per unit when 24,500 units are produced is **$6.20**. To find the total fixed manufacturing overhead incurred at this level of production, we multiply the per-unit fixed manufacturing overhead by the number of units produced:

\[
\text{Total Fixed Manufacturing Overhead} = \text{Fixed Manufacturing Overhead per Unit} \times \text{Number of Units}
\]

\[
\text{Total Fixed Manufacturing Overhead} = 6.20 \times 24,500 = 151,900
\]

Since fixed costs don't change with production levels, this total of **$151,900** will remain constant whether 24,500 units or 27,000 units are produced. Therefore, the **total fixed manufacturing overhead incurred at 27,000 units is $151,900**.

Would you like further clarification on any part of this?

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Here are 5 related questions for practice:

1. What would be the total variable costs if 27,000 units are produced?
2. How would the total fixed administrative expenses change if the company produces 22,000 units?
3. What is the total cost per unit if 26,000 units are produced?
4. How does fixed selling expense behave as production increases within the relevant range?
5. If sales commissions increase to $2.50 per unit, what would be the total sales commission cost for 27,000 units?

**Tip:** Always separate fixed and variable costs when analyzing total costs, as fixed costs remain unchanged while variable costs vary with production.

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:** If 27,000 units are produced, what is the total fixed manufacturing overhead incurred to support this level of production?

**Note: Round per unit values to 2 decimal places.**

Learn how to calculate the fixed manufacturing overhead for Kubin Company when 27,000 units are produced. This problem demonstrates key cost behavior concepts, including fixed and variable costs, using the formula Total Fixed Cost = Fixed Cost per Unit * Number of Units. Suitable for undergraduate business or accounting students.

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