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Question 5 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 $7.73 Direct labor $2.52 Variable manufacturing overhead $5.92 Variable selling and administrative expenses $4.02   Fixed Costs per Year Fixed manufacturing overhead $241,046 Fixed selling and administrative expenses $247,303 Polk Company sells the fishing lures for $25.75. During 2012, the company sold 80,400 lures and produced 94,900 lures.

(a) Assuming the company uses variable costing, calculate Polk’s manufacturing cost per unit for 2012.  (Round answer to 2 decimal places, e.g.10.50.) Manufacturing cost per unit $

Prepare a variable costing income statement for 2012.

POLK COMPANY Income Statement For the Year Ended December 31, 2012 Variable Costing
				$
		$
				$

\

Question 7

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Gundy Company expects to produce 1,279,560 units of Product XX in 2012. Monthly production is expected to range from 70,980 to 104,160 units. Budgeted variable manufacturing costs per unit are: direct materials $3, direct labor $8, and overhead $10. Budgeted fixed manufacturing costs per unit for depreciation are $5 and for supervision are $2. Prepare a flexible manufacturing budget for the relevant range value using 16,590 unit increments.  (List variable costs before fixed costs.)

GUNDY COMPANY Monthly Flexible Manufacturing Budget For the Year 2012
	$	$	$
	$	$	$
	$	$	$

LINK TO TEXT

2451960

2916480

Activity Level

Finished Units

70980

87570

104160

Variable Costs

Direct Materials

212940

262710

312480

Direct Labor

567840

700560

833280

Overhead

709800

875700

16.17

1041600

Total Variable Costs

1490580

1838970

2187360

Fixed Costs

Depreciation

437850

520800

Supervision

141960

175140

208320

Total Fixed Costs

496860

612990

729120

Total Costs

1987440