ACC 561 - Polk Company builds custom fishing lures for sporting goods stores

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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    $7.50

Direct labor    $2.45

Variable manufacturing overhead    $5.75

Variable selling and administrative expenses    $3.90

 

Fixed Costs per Year

Fixed manufacturing overhead $234,650

Fixed selling and administrative expenses $240,100

 

 

 

Polk Company sells the fishing lures for $25. During 2012, the company sold 80,000 lures and produced 95,000 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.

    • 9 years ago
    A+ Answer - Accurate and economical
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