Compute the manufacturing cost of one unit

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Reference no: EM133496097

Question: Franklin Company produces and sells tennis balls. The following costs are available for the year ended December 31, 2014. The company has no beginning inventory. In 2014, 8,000,000 units were produced, but only 7,500,000 units were sold. The unit selling price was $0.50 per ball. Costs and expenses were:

Variable costs per unit
Direct materials $0.10
Direct labor 0.05
Variable manufacturing overhead 0.08
Variable selling and administrative expenses 0.02
Annual fi xed costs and expenses
Manufacturing overhead $500,000
Selling and administrative expenses 100,000

(a) Compute the manufacturing cost of one unit of product using variable costing.

(b) Prepare a 2014 income statement for Franklin Company using variable costing

Reference no: EM133496097

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