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Big Sports Manufacturing produces basketballs used for indoor and outdoor games. The company has had significant troubles over the past few years, as the number
Big Sports Manufacturing produces basketballs used for indoor and outdoor games. The company has had significant troubles over the past few years, as the number of competitors in the basketball market has increased dramatically. Recently, the company was forced to cut back production in order to decrease its rising inventory level. The following is a list of costs for the company in 2020: Variable costs per unit Rubber $2.75 Other materials-indirect 1.40 Ball makers-direct labour 5.60 0.50 Factory electricity usage Factory water usage Other labour-indirect 0.15 0.27 Selling and administrative expenses 0.40 Fixed costs per year Factory property taxes Factory sewer usage Factory electricity usage Selling and administrative expenses $120,000 50,000 40,000 83,000 Big Sports Manufacturing had an ending inventory of 85,000 basketballs in 2019. For these units, the fixed manufacturing overhead cost was $4.00 per unit and variable manufacturing costs were $9.67 per unit. In 2020, the company produced 35,000 basketballs, sold 72,500 basketballs, and had an ending inventory of 47,500 basketballs. The basketballs sold for $18 each. Big Sports uses the FIFO method. BIG SPORTS MANUFACTURING Variable-Costing Income Statement Sales in units $ $ $ Calculate the manufacturing cost per unit under a throughput-costing system. (Round answer to 2 decimal places, e.g. 15.25.) per unit Manufacturing cost $ Prepare a throughput-costing income statement for 2020. Assume that increased costs in 2020 are related to variable costs other than materials
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