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 $ 9.85

  Direct labor 3.65

  Variable manufacturing overhead 1.3

  Variable selling and administrative expenses 0.65

  Fixed Cost per Month

  Fixed manufacturing overhead $ 16,125

  Fixed selling and administrative expenses 5,200



Dance Creations charges $32 for each skirt that it sells. During the first month of operation, it made 1,500 skirts and sold 1,425.



Required :

1.
Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. (Round your answer to 2 decimal places.)



2.
Complete a variable costing income statement for last month. (Round your answers to 2 decimal places.)



3.
Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for last month. (Round your answer to 2 decimal places.)



4.
Complete a full absorption costing income statement. (Round your answers to 2 decimal places.)



6.
Suppose next month Dance Creations expects to produce 1,200 hula skirts and sell 1,300. Without any calculations, decide whether variable or full absorption costing will show a higher profit.

Variable Costing

Full Absorption Costing

pur-new-sol

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