Kate's 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 the projections of Kate's Kale Chips for the upcoming quarter:

ProjectionsSales20,000bagsProduction22,000bagsVariable manufacturing cost per bag$2.00Sales and distribution costs per bag$0.15Total fixed manufacturing overhead$33,000Fixed administrative overhead$18,000

Required:

1. Compute the projected product cost per bag produced under full costing.

2. Compute the projected product cost per bag under variable costing.