1.

Depreciation on salesperson cars Period cost

2. Rent on equipment used in the factory Product cost
3. Lubricants used for machine maintenance Product cost
4. Salaries of personnel who work in the Product cost
finished good warehouse
5. Soap and paper towels used by factory Product cost
workers at the end of the shift
6. Factory supervisors' salaries Product cost
7. Heat, water and power consumed in the Product cost
factory
8. Materials used for boxing products for Product cost
shipment overseas
9. Adverstising costs Period cost
10.Workers' compensation insurance for Product cost
factory employees
11.Depreciation on chairs and tables in the Product cost
factory lunchroom
12. The wages of the receptionist in the Period cost
administrative offices
13. Cost of leasing the corporate jet used by Period cost
the company executives
14. The cost of renting rooms at a Florida resort Period cost
for the annual sales conference
15. The cost of packaging the company's product Product cost
E Traditional Format

Sales $ 600,000
Cost of Good Sold 160,000
Gross Margin 440,000
Selling and Administrative Expenses
Selling $ 120,000
Administrative $ 70,000 190,000
Net Operating Income $

Contribution Format
Sales $ 600,000
Cost of Good Sold $ 160,000
Variable Selling Cost 80,000
Variable Admin Cost 40,000
Contribution Margin $ 320,0
Fixed Selling Cost 40,000
Fixed Admin Cost 30,000 $
Net Operating Income
at 6

$ 600,000
160,000
440,000
istrative Expenses
120,000
$ 70,000 190,000
ome $ 250,000

mat
$ 600,000
$ 160,000
ost 80,000
ost 40,000 $ 280,000
gin $ 320,000
40,000
30,000 $ 70,000
ome $ 250,000
 Average Cost per Unit Total Cost
Direct Materials 7.00140,000.00
Direct Labor 4.00 80,000.00
1.A Total direct manufacturing cost 11.00

Average Cost per Unit Total

Variable manufacturing overhead 1.50 30,0
Fixed manufacturing overhead 5.00
1.B Total indirect manufacturing cost 6.50

_______________________________________________

Average Cost per Unit Total

Direct Materials 7.00 140,000.00
Direct Labor 4.00 80,000.00
Variable manufacturing overhead 1.50 30,0
Fixed manufacturing overhead 5.00 100,0
2.A Total direct manufacturing cost ) 17.50
(Mfg Dept)
Average Cost per Unit Total
2.B Total indirect manufacturing cost - 0
(Mfg Dept)
_______________________________________________
Details for Q. no 3

Total fixed selling expense 3.5070,000.00

Less; Marketing expense (50,000.00)
20,000.00
Add; Sales rep commission 20,000.00
3A.Total direct selling expense 40,000.00

3.B. Total indiect selling expense 50,000.00

_______________________________________________

4. Admin cost can either be direct or indirect costs, depen

will not be always treated as an indirect cost in Kubin com
management report.
r Unit Total Cost
140,000.00
80,000.00
ng cost 11.00 220,000.00

ge Cost per Unit Total Cost

erhead 1.50 30,000.00
ead 5.00 100,000.00
ring cost 6.50 130,000.00

______________________________________________

e Cost per Unit Total Cost

7.00 140,000.00
80,000.00
rhead 1.50 30,000.00
ad 5.00 100,000.00
ng cost ) 17.50 350,000.00

e Cost per Unit Total Cost

ring cost - 0

______________________________________________

3.5070,000.00
(50,000.00)
0
20,000.00
se 40,000.00

ense 50,000.00

______________________________________________

direct or indirect costs, depending on the cost object. It

s an indirect cost in Kubin company's internal
1. Traditional Format Income Statement
Sales 150,000.00
Cost of goods sold
Beginning merchandise inventory 30,000.00
Merchandise purchases 100,00
Total goods available for sale 13
Less; Ending inventory (40,000.00
Gross Profit 60,000.0
Less expenses
Selling Expense*
Administrative Expense ** 22,000.00
Net Income 8,000.

2. Contribution Format Income Statement

Sales 150,000.00
Less : Variable expenses
Cost of goods sold 90,000.00
Variable selling expense 10,000.00
Variable administrative expense 2,000.00
Contribution margin 48,000.00
Less; fixed expenses
Fixed selling expense 20,000.00
Fixed administrative expense 20,000.00
Net income 8,000.00

3. Contribution margin per unit

Contribution margin 48,000.00
Units sold 200.00
Contribution margin per unit
at Income Statement
150,000.00

dise inventory 30,000.00

ases 100,000.00
le for sale 130,000.00
ory (40,000.00) (90,000.00)
60,000.00
30,000.00
ense ** 22,000.00 (52,000.00)
8,000.00

mat Income Statement

150,000.00
nses
90,000.00
ense 10,000.00
tive expense 2,000.00 (102,000.00)
n 48,000.00
s
se 20,000.00
e expense 20,000.00 (40,000.00)
8,000.00

rgin per unit

n 48,000.00
200.00
n per unit 240.00