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.



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