Question

Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2020, the company incurred the following costs.
Variable Costs per Unit
Direct materials $7.50
Direct labor $3.45
Variable manufacturing overhead $5.80
Variable selling and administrative expenses $3.90
Fixed Costs per Year
Fixed manufacturing overhead $225,000
Fixed selling and administrative expenses $210,100
A. Assuming the company uses variable costing, calculate Siren’s manufacturing cost per unit for 2017.
B. Prepare a variable costing income statement for 2017.
C. Assuming the company uses absorption costing, calculate Siren’s manufacturing cost per unit for 2017.
D. Prepare an absorption costing income statement for 2017.

Answer 1

Answer:

Part A.

$16.75

Part B.

Variable costing income statement for 2017

Fi

Part C.

Part D.

Absorption costing income statement for 2017

Explanation:

The question is incomplete, however see explanations below

Cost per unit - Variable Costing

Only consider the Variable Manufacturing Costs

Cost per unit - Variable Costing = $16.75

Cost per unit - Absorption Costing  

Consider Both Variable and Fixed Manufacturing Costs