Exercise 19-17 Siren Company builds custom fishing lures for sporting goods stor
ID: 2570551 • Letter: E
Question
Exercise 19-17 Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2017, the company incurred the following costs. Variable Costs per Unit Direct materials Direct labor Variable manufacturing overhead Variable seing and administrative expenses $7.95 $3.66 $6.15 $4.13 Fixed Costs per Year Fixed manufacturing overhead Fixed selling and administrative expenses $251,750 $222,706 Siren Company sells the fishing lures for $26.50. During 2017, the company sold 81,000 lures and produced 95,000 lures. Assuming the company uses variable costing, calculate Siren's manufacturing cost per unit for 2017. (Round answer to 2 decimal places, e.g.10.50.) Manufacturing cost per unit LINK TO TEXTExplanation / Answer
1) Variable manufacturing cost per unit under variable costing = 17.76 per unit
2) Variable costing income statment :
Absorption costing manufacturing cost per unit = (251750/95000)+17.76 = 20.41
Prepare income statement absorption costing ;
Sales 2146500 Less: Variable cost of goods sold (1438560) Gross contribution margin 707940 Less: Variable selling and administrative exp (334530) Net contribution margin 373410 Less : FIxed expenses Manufacturing (251750) Selling and administrative (222706) (474456) Net operating income (101046)Related Questions
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