Reference no: EM132019938
Problem - Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs.
Variable Cost per Unit
Direct materials $8.18
Direct labor $2.67
Variable manufacturing overhead $6.27
Variable selling and administrative expenses $4.25
Fixed Costs per Year
Fixed manufacturing overhead $255,819
Fixed selling and administrative expenses $261.709
Polk Company sells the fishing lures for $27.25. During 2012, the company sold 80,200 lures and produced 95,100 lures.
(a) Assuming the company uses variable costing, calculate Polk's manufacturing cost per unit for 2012.
(b) Prepare a variable costing income statement for 2012.
(c) Assuming the company uses absorption costing, calculate Polk's manufacturing cost per unit for 2012.
(d) Prepare an absorption costing income statement for 2012.
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