Problem: 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 $8.25
Direct labor $2.70
Variable manufacturing overhead $6.33
Variable selling and administrative expenses $4.29
Fixed Costs per Year
Fixed manufacturing overhead $258,128
Fixed selling and administrative expenses $264,110
Polk Company sells the fishing lures for $27.50. During 2012, the company sold 80,900 lures and produced 94,900 lures. Assuming the company uses variable costing, calculate Polk's manufacturing cost per unit for 2012.
Manufacturing cost per unit 17.28
Prepare a variable costing income statement for 2012.