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Print by: CHRISTIAN COLLOR ACC/561 - 42075079 / Assignment: Week 5 Assignment

* 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		$7.80
Direct labor		$2.55
Variable manufacturing overhead		$5.98
Variable selling and administrative expenses		$4.06

Fixed Costs per Year
Fixed manufacturing overhead		$246,977
Fixed selling and administrative expenses		$249,704

Polk Company sells the fishing lures for $26.00. During 2012, the company sold 81,300 lures and produced 96,100 lures.

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* Question 5


	Your answer is correct.

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

16.33

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* Question 5


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Prepare a variable costing income statement for 2012.

POLK COMPANY Income Statement For the Year Ended December 31, 2012 Variable Costing
Sales		$ 2113800
Variable Cost of Goods Sold	$ 1327629
Variable Selling and Administrative Expenses	330078
		1657707
Contribution Margin		456093
Fixed Manufacturing Overhead	246977
Fixed Selling and Administrative Expenses	249704
		496681
Net Income/(Loss)		$ (40588)

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* Question 5


	Your answer is correct.

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

Manufacturing cost per unit

18.90

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* Question 5


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Prepare an absorption costing income statement for 2012.

POLK COMPANY Income Statement For the Year Ended December 31, 2012 Absorption Costing
Sales		$ 2113800
Cost of Goods Sold		1536570
Gross Profit		577230
Variable Selling and Administrative Expenses	$ 330078
Fixed Selling and Administrative Expenses	249704
		579782
Net Income/(Loss)		(2552)

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Attempts: 1 of 3 used