Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs.
| Variable Cost per Unit | ||
| Direct materials | $8.03 | |
| Direct labor | $2.62 | |
| Variable manufacturing overhead | $6.15 | |
| Variable selling and administrative expenses | $4.17 | |
| Fixed Costs per Year | ||
| Fixed manufacturing overhead | $253,968 | |
| Fixed selling and administrative expenses | $256,907 |
Polk Company sells the fishing lures for $26.75. During 2012, the company sold81,200lures and produced96,200lures.