Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 35

Product cost under full versus variable costing Kate's Kale Chips produces a healthy snack made primarily of kale. Each bag of the product sells for $5. The company computes the manufacturing overhead rate on a quarterly basis based upon the planned number of units to be produced that quarter. The following data are from the projections of Kate's Kale Chips for the upcoming quarter:

Required
1. Compute the projected product cost per bag produced under full costing.
2. Compute the projected product cost per bag under variable costing.