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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 the projections of Kates Kale Chips for the upcoming quarter:
Projections | ||
---|---|---|
Sales | 24,000 | bags |
Production | 26,000 | bags |
Variable manufacturing cost per bag | $ 2.80 | |
Sales and distribution costs per bag | $ 0.55 | |
Total fixed manufacturing overhead | $ 59,800 | |
Fixed administrative overhead | $ 22,000 |
Required:
1. Compute the projected product cost per bag produced under full costing.
2. Compute the projected product cost per bag under variable costing.
(Round your answers to 2 decimal places.)
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