Polk Company builds custom fishing lures for sporting goods stores. In its first
ID: 2659849 • Letter: P
Question
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 $255,281 Fixed selling and administrative expenses $261,709
Polk Company sells the fishing lures for $27.25. During 2012, the company sold 80,600 lures and produced 94,900 lures. 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 $255,281 Fixed selling and administrative expenses $261,709
Polk Company sells the fishing lures for $27.25. During 2012, the company sold 80,600 lures and produced 94,900 lures. Assuming the company uses variable costing, calculate Polk Assuming the company uses variable costing, calculate Polk
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 $255,281 Fixed selling and administrative expenses $261,709
Polk Company sells the fishing lures for $27.25. During 2012, the company sold 80,600 lures and produced 94,900 lures. (a) Assuming the company uses variable costing, calculate Polk Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs.
Explanation / Answer
Hi,
Please find the answer as follows:
You need to consider only the variable cost of production under the variable costing method. Fixed cost per unit is not considered as a part of cost of inventory produced.
Manufacturing Cost Per Unit = 8.18 (Direct Materials) + 2.67 (Direct Labor) + 6.27 (Variable Manufacturing Overhead) = 17.12
Answer is 17.12
Thanks.