Envision Toy Co. manufactures toy boats. During 2013, total costs incurred in making 27,000 toy boats included $94,500 of fixed manufacturing overhead. The total absorption cost per toy boat was $30.80.
(a.) Calculate the variable cost per toy boat.
(b.) The ending inventory of toy boats was 5,800 units higher at the end of 2013 than at the beginning of the year. By how much and in what direction (higher or lower) would cost of goods sold for 2013 be different under direct costing than under variable costing?
(c.) Express the toy boat cost in a cost formula. What does this formula suggest the total cost of making an additional 2,900 toy boats would be?

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The Answer of Envision Toy Co. manufactures toy boats. During 2013, total costs incurred in making 27,000 toy boats included $94,500 of fixed manufacturing overhead. The total absorption cost per toy boat was $30.80.
(a.) Calculate the variable cost per toy boat.
(b.) The ending inventory of toy boats was 5,800 units higher at the end of 2013 than at the beginning of the year. By how much and in what direction (higher or lower) would cost of goods sold for 2013 be different under direct costing than under variable costing?
(c.) Express the toy boat cost in a cost formula. What does this formula suggest the total cost of making an additional 2,900 toy boats would be?