Sharpens Incorporated produces knife sets for use in commercial kitchens.

Sharpens Incorporated produces knife sets for use in commercial kitchens. They sell for $400.00 each.

Selected data for the company’s operations last year follow below.

Units in beginning inventory 0

Units produced 3000

Units sold 2500

Units in ending inventory 500

Variable cost per unit

Direct materials $120.00

Direct labor 80

Variable manufacturing overhead 40

Variable selling and administrative 20

Fixed costs

Fixed manufacturing overhead $ 300,000

Fixed selling and administrative $ 200,000

a. Assume that the company uses variable costing, compute the unit cost for one knife set? (Show all work)

b. Assuming that the company uses absorption costing, compute the unit cost for one knife set. (Please show all work so I am able to learn this stuff)

Sharpens Incorporated produces knife sets for use in commercial kitchens.