Manufacturing Cost Per Unit Cost Method Polk Company - 550 Words

Manufacturing Cost Per Unit: Variable Cost Method, Costing Methods for Polk Company (Math Problem Sample) Content: Costing Methods for Polk Company * Manufacturing Cost Per Unit: Variable Cost Method $ Direct Material 7.5 Direct Labor 2.45 Variable Manufacturing Overhead 5.75 Manufacturing Cost Per Unit 15.7 * Manufacturing Cost Per Unit: Absorption Cost Method Direct Material 7.5 Direct Labor 2.45 Variable Manufacturing Overhead 5.75 Fixed Manufacturing Overhead 2.47* Manufacturing Cost Per Unit 18.17 Note: 1. * Fixed Manufacturing Overhead(2.47) is calculated as, 234,650 95,000 2. Fixed manufacturing overhead is not used in calculating the cost per unit of lures under variable cost. 3. Both variable and fixed Selling and administration expenses are not relevant in computing per unit cost * Variable Costing Income Statement Sales (80,000 * 25) 2,000,000 Less: Variable cost of goods sold Variable cost of goods available for sale (95,000*5.75) 546,250 Closing Inventory (95,000-80,000) *5.75 186,250 -460,000 Gross contributio n margin 1,540,000 Variable selling and administration (80,000*3.90) 312,000 1,228,000 Less: Period costs Selling and Administration 240,100 Manufacturing 234,650 -474,750 Net Operating Income 753,250 * Absorption Costing Income Statement Sales (80,000 * 25) 2,000,000 Less: Cost of Goods Sold Cost of Goods Manufactured (95000*8.22) 780,900 Closing Inventory (15,000*8.22) -123,300 -657,600 Gross Profit 1,342,400 Less: Selling and Administration Expenses Fixed 240,100 Variable 800,000*3.90 312,000 -552,100 753,200 Note: Manufacturing Cost per Unit is calculated as follows.Variable Cost 5.75 Fixed Cost 234,650 95,000 2.47