Polk company variable and absorption costing

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 $241,100

Polk Company sells the fishing lures for $25. 

During 2012, the company sold 80,000 lures and produced 95,000 lures.