Dance Creations manufactures authentic Hawaiian hula skirts that arepurchased for traditional Hawaiian celebrations, costume parties, andother functions. During its first year of business, the company incurredthe following costs:Variable Cost per Hula SkirtDirect materialsDirect labor$ 9.60$ 3.40$ 1.05Variable selling and administrative expenses$ 0.40Variable manufacturing overheadFixed Cost per MonthFixed manufacturing overheadFixed selling and administrative expenses$ 16,125$ 4,950Dance Creations charges $30 for each skirt that it sells. During the firstmonth of operation, it made 1,500 skirts and sold 1,375.Required:1. Assuming Dance Creations uses variable costing, calculate thevariable manufacturing cost per unit for last month.2. Prepare a variable costing income statement for the last month.

Dance Creations Cost AnalysisProblem SummaryDance Creations manufactures and sells Hawaiian hula…

Answered: Dance Creations manufactures authentic…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 28P: Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed...

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Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the company incurred the following costs: Variable Cost per Hula Skirt Direct materials $ 9.60 Direct labor 3.40 Variable manufacturing overhead 1.05 Variable selling and administrative expenses 0.40 Fixed Costs per Month Fixed manufacturing overhead $ 16,125 Fixed selling and administrative expenses 4,950 Dance Creations charges $30 for each skirt that it sells. During the first month of operation, it made 1,500 skirts and sold 1,375. Required: 1. Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. 2. Complete a contribution margin income statement for the last month. 3. Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for the last month. 4. Complete a full…
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