Felde company builds custom fishing lures

E6-17 Felde Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2014, the company incurred the following costs.

Variable Cost per Unit

 

Fixed Costs per Year

Direct materials

$7.50

Fixed manufacturing overhead

$225,000

Direct labor

2.45

Fixed selling and administrative expenses

240,100

Variable manufacturing overhead

5.80

 

Variable selling and administrative expenses

3.90

 

 

Felde Company sells the fishing lures for $25.00 During 2014, the company sold 80,000 lures and produced 90,000 lures

 

 

Instructions

(a) Assuming the company uses variable costing, calculate Felde manufacturing cost per unit for 2014.

(b) Prepare a variable costing income statement for 2014.

(c) Assuming the company uses absorption costing, calculate Felde manufacturing cost per unit for 2014.

(d) Prepare an absorption costing income statement for 2014.

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