â€¢ Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs.Variable Cost per Unit Direct materials ???$7.50Direct labor ???$2.45Variable manufacturing overhead ???$5.75Variable selling and administrative expenses ???$3.90Fixed Costs per Year Fixed manufacturing overhead $234,650Fixed selling and administrative expenses $240,100
â€¢ Polk Company sells the fishing lures for $25. During 2012, the company sold 80,000 lures and produced 95,000 lures.â€¢ Instructions(a) Assuming the company uses variable costing, calculate Polk’s manufacturing cost per unit for 2012.(b) Prepare a variable costing income statement for 2012.(c) Assuming the company uses absorption costing, calculate Polk’s manufacturing cost per unit for 2012.(d) Prepare an absorption costing income statement for 2012.