Project $2$

Question $2$ of $3$

Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak.

Kevlar ${?}^{}$

Resin and supplies

Finishing kit $($seat$,$ rudder, ropes, etc.$)$

Direct Labor

Selling and administrative expenses$-$variable

Selling and administrative expenses$-$fixed

Manufacturing overhead$-$fixed

$$250$ per kayak

$$190$ per kayak

$$160$ per kayak

$$420$ per kayak

$$430$ per kayak

$$183,500$ per year

$$320,000$ per year

Bill and Diane have asked you to provide a cost$-$volume$-$profit analysis, to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayall be $$2,400.$

$($a$)$

Calculate unit variable costs.

Unit variable costs

$

per unit