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Question(s) / Instruction(s):

TroutPro Co. manufactures fishing equipment. During 2010, total costs associated with manufacturing 16,500 fly-cast fishing rods (a new product introduced this year) were as follows:

 

       

Raw materials

$

68,500

 

Direct labor

 

16,000

 

Variable manufacturing overhead

 

13,900

 

Fixed manufacturing overhead

 

16,000

 

 

Requirement 1:

Calculate the cost per fishing rod under both variable costing and absorption costing. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

 

   

Variable cost per rod

$

Absorption cost per rod

$


 

Requirement 2:

If 350 of these fishing rods were in finished goods inventory at the end of 2010, by how much and in what direction (higher or lower) would 2010 operating income be different under variable costing than under absorption costing? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

 

Operating income under variable costing would be $ , than
under absorption costing.

 

Requirement 3:

(a)

Express the fishing rod cost in a cost formula. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

 

Total cost = $ + $ per fishing rod produced

 

(b)

What does this formula suggest the total cost of making an additional 375 fishing rods would be? (Do not round your intermediate calculations and round final answer to 2 decimal places. Omit the "$" sign in your response.)

 

Total Additional cost

$

 

 

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