PlayCraft Company manufactures toy boats. During 2022, total costs incurred in making 54,000 toy boats included $189,000 of fixed manufacturing overhead. The total absorption cost per toy boat was $28.50.

Required:

1. Calculate the variable cost per toy boat.
2. The ending inventory of toy boats was 11,600 units higher at the end of 2022 than at the beginning of the year. By how much and in what direction (higher or lower) would cost of goods sold for 2022 be different under direct (or variable) costing than under absorption costing?
3. Express the toy boat cost in a cost formula. What does this formula suggest the total cost of making an additional 5,800 toy boats would be?

Complete this question by entering your answers in the tabs below.

Required A

Calculate the variable cost per toy boat.

Note: Do not round your intermediate calculations.

Variable cost of the oy boat

Required B

The ending inventory of toy boats was 11,600 units higher at the end of 2022 than at the beginning of the year. By how much and in what direction (higher or lower) would cost of goods sold for 2022 be different under direct (or variable) costing than under absorption costing? Note: Do not round your intermediate calculations.

Under direct (or variable) costing the cost of goods sold would be

than under absorption costing

Required C

Express the toy boat cost in a cost formula. What does this formula suggest the total cost of making an additional 5,800 toy boats would be? (Round Note: Do not round your intermediate calculations.

Total cost formula =			X number of toy boats
Total additional cost