Question

I NEED THE ANSWER FOR SECTION C (C1, C2)

TroutPro Co. manufactures fishing equipment. During 2016, total costs associated with manufacturing 12,500 fly-cast fishing rods (a new product introduced this year) were as follows:

Raw materials	$	64,900
Direct labor		18,300
Variable manufacturing overhead		13,850
Fixed manufacturing overhead		18,000

a. Calculate the cost per fishing rod under both variable costing and absorption costing. (Round your answers to 2 decimal places.)

Variable cost per road: 7.76 each

Absorption cost per road: 9.20 each

b. If 310 of these fishing rods were in finished goods inventory at the end of 2016, by how much and in what direction (higher or lower) would 2016 operating income be different under variable costing than under absorption costing? (Do not round intermediate calculations.)

Under variable costing, operating income would be 447  , lower than under absorption costing

c-1. Express the fishing rod cost in a cost formula. (Round your answers to 2 decimal places.)

Total cost = _______ + ____________ per fishing rod produced

c-2. What does this formula suggest the total cost of making an additional 200 fishing rods would be? (Round your intermediate calculations and final answer to 2 decimal places.)

Total additional cost ____________

Thank you

Answer 1

c-1

Total cost = $18,000 + $7.764 per fishing rod purchased

Explanation:-

Variable manufacturing costs:
Raw materials	$64,900
Direct labor	$18,300
Variable manufacturing overhead	$13,850
	$97,050
Variable cost per rod = $97,050/12,500 = $7.764 each

C-2

Total additional cost = $1,552.8

Explanation:-

Total cost of make additional units = 200 × $7.764 = $1,552.8