Question
Kates Kale Chips produces a healthy snack made primarily of kale. Each bag of the product sells for $5. The company computes the manufacturing overhead
Kates Kale Chips produces a healthy snack made primarily of kale. Each bag of the product sells for $5. The company computes the manufacturing overhead rate on a quarterly basis based upon the planned number of units to be produced that quarter. The following data are from Kates Kale Chipss projections for the upcoming quarter: Projections Sales 22,500 bags Production 24,500 bags Variable manufacturing cost per bag $ 2.50 Sales and distribution costs per bag $ 0.40 Total fixed manufacturing overhead $ 49,000 Fixed administrative overhead $ 20,500
1. Compute the projected product cost per bag produced under absorption costing.
Compute the projected product cost per bag under variable costing
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