Felde Company builds custom fishing lures for sporting goods stores. In its firs
ID: 2600199 • Letter: F
Question
Felde Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2014, the company incurred the following costs. Variable Costs per Unit Direct materials $7.58 Direct labor $2.47 Variable manufacturing overhead $5.81 Variable selling and administrative expenses $3.94 Fixed Costs per Year Fixed manufacturing overhead $238,293 Fixed selling and administrative expenses $242,501 Felde Company sells the fishing lures for $25.25. During 2014, the company sold 81,300 lures and produced 95,700 lures.
Assuming the company uses variable costing, calculate Felde’s manufacturing cost per unit for 2014. (Round answer to 2 decimal places, e.g.10.50.)
Explanation / Answer
P&L Account as per vaiable costing Per unit Amount Sales 25.25 20,52,825 Variable Cost Direct Material 7.58 6,16,254 Direct Labor 2.47 2,00,811 Variable Mfg Ohs 5.81 4,72,353 Variable Selling & Admin Cost 3.94 3,20,322 Contribution 4,43,085 Fixed Cost Fixed Mfg Cost 2,38,293 Fixed Selling & Admin Cost 2,42,501 Loss -37,709 Calculation of Mfg Cost (as per variable costing) Direct Material 7.58 Direct Labor 2.47 Variable Mfg Ohs 5.81 Total Mfg cost per unit 15.86
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