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[solution]: Kate's Kale Chips produces a healthy snack made primarily of


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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 Kate?s Kale Chips?s projections for the upcoming quarter:

  

  Projections
  Sales   27,000  bags
  Production   29,000  bags
  Variable manufacturing cost per bag $ 3.40  
  Sales and distribution costs per bag $ 0.35  
  Total fixed manufacturing overhead $ 49,300  
  Fixed administrative overhead $ 25,000  

  

Required:
1.

Compute the projected product cost per bag produced under absorption costing.

 


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