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Felde Fishing

Price: $1.99


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


Variable Costs per Unit 
Direct materials   7.50
Direct labor   2.45
Variable manufacturing overhead   5.80
Variable selling and adm. Expenses  3.90
 
Fixed Costs per Year 
Fixed manufacturing overhead  225,000
 Fixed selling and adm. Expenses  240,100

Felde Company sells the fishing lures for $25. During 2014, the company sold 80,000 lures and
produced 90,000 lures.

Instructions
(a) Assuming the company uses variable costing, calculate Felde’s manufacturing cost per
unit for 2014.
(b) Prepare a variable costing income statement for 2014.
(c) Assuming the company uses absorption costing, calculate Felde’s manufacturing cost
per unit for 2014.
(d) Prepare an absorption costing income statement for 2014.

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