Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs.<\/p>\n
Variable Cost per Unit<\/span><\/strong> Fixed Costs per Year<\/span><\/strong> Polk Company sells the fishing lures for $25. During 2012, the company sold 80,000 lures and produced 95,000 lures.<\/p>\n (a) Assuming the company uses variable costing, calculate Polk\u2019s manufacturing cost per unit for 2012.<\/strong><\/p>\n (b) Prepare a variable costingincome statement for 2012.<\/strong><\/p>\n (c) Assuming the company uses absorption costing, calculate Polk\u2019s manufacturing cost per unit for 2012.<\/strong><\/p>\n (d) Prepare an absorption costing income<\/p>\n #1 In this case , would it be better to use the variable or absorption costing method, and why?<\/strong><\/p>\n #2What are the benefits of the two methods?<\/strong><\/p>\n Which method would lead to the best decision when a competitor is submitting a lower bid for your product?<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" 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 Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-176222","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/176222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=176222"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/176222\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=176222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=176222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=176222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Direct materials ???$7.50
Direct labor ???$2.45
Variable manufacturing overhead ???$5.75
Variable selling and administrative expenses ???$3.90<\/p>\n
Fixed manufacturing overhead $234,650
Fixed selling and administrative expenses $240,100<\/p>\n