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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Matt’s Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2011, 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
Matt’s Company sells the fishing lures for $25. During 2011, the company sold 80,000 lures and produced 95,000 lures.
Instructions
(a) Assuming the company uses variable costing calculate Matt’s manufacturing cost per unit for 2011.
(b) Prepare a variable costing income statement for 2011.
(c) Assuming the company uses absorption costing calculate Matt’s manufacturing cost per unit for 2011.
(d) Prepare an absorption costing income statement for 2011.
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