Reference no: EM132657324

Discon Corporation manufactures a popular doll called Teardrops. Last year the company started with 10,200 dolls, produced 215,000 dolls, and ended the year with 8,200 dolls. Each doll was sold for $21.

The actual unit cost for Teardrops is given below:

Direct material: $2.20
Direct labour: 0.60
variable overhead: 2.70
Fixed overhead: 7.00
Total unit cost: $12.50

The only selling expenses were a commission of $2 per unit sold and advertising amounting to $352,000. Administrative expenses, all fixed, equalled $272,000. There were no beginning and ending work-in-process inventories.

Required:

Problem 1. Make an income statement.

Problem 2. Calculate the following per unit costs: (Round your answers to 2 decimal places.)

a. Prime cost,
b. Conversation cost
c. Variable cost