Polk Company builds custom fishing lures for
sporting goods stores. In its first year of operations, 2012, the company incurred the following costs.
| Variable Cost per Unit |
|
|
| Direct materials |
|
$7.73 |
| Direct labor |
|
$2.52 |
| Variable manufacturing overhead |
|
$5.92 |
| Variable selling and administrative expenses |
|
$4.02 |
| |
|
|
| Fixed Costs per Year |
|
|
| Fixed manufacturing overhead |
|
$242,824 |
| Fixed selling and administrative expenses |
|
$247,303 |
Polk Company sells the fishing lures for $25.75. During 2012, the company sold 80,600 lures and produced 95,600 lures.
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